armin's method works. I get vertical scroll and everything.

One caveat. If you use it in tandem with a usb mouse, you can't use the
mouse to open the men bar on top. this can be rectified by binding the
windows/super key to the menu or clicking with the touchpad. strangely
enough, the usb mouse can click within the menu once it is open.

Attached is my working xorg.conf

** Attachment added: "xorg.conf"
   http://launchpadlibrarian.net/10901938/xorg.conf

-- 
[Hardy][Regression] Touchpad vertical scroll does not work
https://bugs.launchpad.net/bugs/173411
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