Recent versions of vte include a new option to toggle whether the terminal should send keystrokes for scrolling when using alternate screen. This is the feature that allows a mouse scroll wheel to control scrolling in text-mode programs (like less) when running within a GUI terminal. Gnome-terminal was updated to expose this option as a check box among the preferences. I don't see it exposed in the xfce terminal, which leaves me unable to use this feature that was formerly enabled by default. See these bug reports for details: http://bugzilla.gnome.org/show_bug.cgi?id=538195 https://bugs.launchpad.net/ubuntu/+source/screen/+bug/106995
It looks like vte upstream has not yet accepted the patch to make alternate screen scrolling configurable, but Ubuntu has put it in their build. Maybe you guys can put a little more pressure on upstream to adopt this. Also, take a look at this bug (538195 was marked as a duplicate of it): http://bugzilla.gnome.org/show_bug.cgi?id=518405 which has patches against trunk at 2008-11-18 for vte and gnome terminal.
This was not fixed in Ubuntu (as of 11.10 in Dec 2011). If the patch was put in, it did not work. See comments #16-19 in https://bugs.launchpad.net/ubuntu/+source/xfce4-terminal/+bug/358796?comments=all
This function has been removed from vte. xfce4-terminal allows to enable or disable scrolling on keystroke.