When will i learn sheesh ... I am ok, but i again messed up the basics. I assumed the problem is a complicated one when it was not. Well this what happened, i had my system (Gentoo Linux) up for about two days and i did some updates. I dont remember what they were but some were surely related to the touchpad driver. While testing a program ( front end for linc, cyberoam client ) X restarted and the touchpad scrolling and tapping was lost. I tried a lot of things starting from editing xorg.conf to kernel upgradation, nothing worked. The output of synclient -m 1000 (monitor touchpad activity) were all zeros. I tried finding any reported bugs, ... anything.
Well then at last i found what i looking for in the Gentoo Wiki. Although i did look into the xorg.conf file i assumed that the mouse device specified was the correct one, but i never confirmed it.
The touchpad's device file can be can be found using cat /proc/bus/input/devices. The device file name can be found on the Handlers line. This what i get on my system (only the touchpad part shown) :
I: Bus=0011 Vendor=0002 Product=0007 Version=25b1 N: Name="SynPS/2 Synaptics TouchPad" P: Phys=isa0060/serio4/input0 S: Sysfs=/class/input/input3 U: Uniq= H: Handlers=mouse0 event3 B: EV=b B: KEY=6420 0 70000 0 0 0 0 0 0 0 0 B: ABS=11000003
In the xorg.conf file the touchpad section had the line
Option "Device" "/dev/input/event1"
which should have been
Option "Device" "/dev/input/event3"
Well that's it.
Moral : try out simple solutions first and never assume things.