Ahhh... okay, got everything fixed now. Disregard the previous post. Of course it might be helpful for someone else though. I suppose I'm still a bit interested, since this topic hasn't been covered before.
Anyway, Here are the details of what happened to me.
I own a MacAlly iceMouseJr optical mouse. I absolutely love the size and responsiveness of the thing. Previously I owned a Logitech MX310 mouse, which felt a tad on the heavy and bulky side next to my 12-inch PowerBook. So anyway, by default Mac OS X doesn't recognize that this MacAlly mouse has a scrollwheel, unlike the Logitech mouse which it does. So what I did was install the MacAlly control panel and drivers for the mouse to access my settings that way.
Unfortunately, the software that MacAlly provides downright sucks. But then again it hasn't been updated in a while now, so it may be because of changes in Panther or whatever. Anyway the mouse acceleration is absolutely horrendous at all the settings provided by the software. It feels like it's constantly running at a low DPI and the cursor just goes everywhere BUT where you want it to. So I deleted the software and went back to the default OS X mouse preference pane.
Here's where things got interesting. Despite deleting every trace of the MacAlly software and drivers (and running the uninstaller), Mac OS X decided to recognize that my MacAlly mouse had a scrollwheel and offered me scrollwheel speed settings under the Keyboard and Mouse preference pane. Wow. I don't know how but it just randomly decided to add it. It was a pleasant surprise, I guess, and I hope that it stays that way when I replug it during travel.
What wasn't a pleasant surprise was the scrolling speed being set to an ultra low value regardless of how high I turned it up in the settings. Apparently the MacAlly software alters your mouse settings at a system level and keeps it that way after deletion, rather than sticking to its own parameters and being a standalone application like any other well designed software. So I had to download the MacAlly control panel and drivers again and reset my scrolling speed to a higher setting, and then delete it again.
Lesson of the day: Save yourself a headache and make sure you reset your device settings to the OS X default before deleting any control panels or drivers.