I have enabled "Wrap workspaces when the pointer reaches the screen edge" in the "Window Manager" settings.
After updating from xorg-server 1.5.x to xorg-server 1.6.5, I cannot wrap to any workspace on the right using the touchpad (ALPS PS/2 / Synaptics).
I can switch to workspaces on the left, bellow, and above. Any other functions of the touchpad are unaffected (clicking, tapping, selecting, etc.)
It works with an USB mouse.
Steps to reproduce:
1) Update to xorg-server 1.6.x
2) Try to move the pointer off the right screen edge to wrap a workspace.
Workspace is wrapped.
Downgrading to xorg-server 1.5.x solves the problem.
I am not sure if this is a problem with xfce4 or with xorg-server.
Well if there is a regression introduced by a specific version of xorg, I'd say the bug lies there and not in xfwm4.
Especially if it works with a USB mouse, that has nothing to do with the window manager.
I will try and open a bug for it at xorg's bugtracker.