Heya - I've been at this for hours and have read so many of these posts I think I'll do my part...
I have a dell latitude d610 on xp pro - after using driverrobot to do a full system driver update (highly recomended though regardless of the ensuing problem I think - solution below) my ALPS touchpad buttons stopped working - I figured twas a driver issue right, so I tried updating/reinstalling through windows and through the dell site, and same thing - the touchpad could tap and double-click, but could not drag icons or drag-highlight icons, and the buttons didn't work (even though in the mouse properties it had the right settings. After just resorting to uninstalling the ALPS device itself from the device manager list I noticed the touchpad function would return to normal, only to revert back to semi-functional after windows rebooted, detected 'new hardware' and 'fixed' the issue by re-installing the touchpad.
Solution (worked for me:) Whatever I tried nothing changed, so I went into add/remove programs (in control panel) and found the ALPS touchpad pointing-device program. After removing that - all good. I'm assuming it was a seperate program to control touchpad functions - after that the little pad usually by the clock that changes colour to show touchpad activity was gone. What a bloody mission, but another God-damned windows problem bites the dust... Anyway hope it helps someone out there! :)