Just updated to lion 10.7.4 now Apple mouse won't scroll with touch sensor

The mouse is a Apple Magic Mouse a1296-3vdc (Not the mighty mouse with wheel, the sensor one). I don't think I can live without the scroll function..

There do seem to be known issues with the 7300. I'm temped to get an upgrade just for Photoshop performance.
In the meantime, I'm ready to do a complete reinstall on the new drive.
Hatter, what steps would you recommend for the most reliable results?

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