With my Thinpad T60p the Touchpad also does not work since the Upgrade from 6.10 to 7.04. In Xorg.0.log I find the following:

---
(**) Option "CorePointer"
(**) Configured Mouse: Core Pointer
(**) Option "Device" "/dev/input/mice"
(**) Option "Emulate3Buttons" "true"
(**) Configured Mouse: Emulate3Buttons, Emulate3Timeout: 50
(**) Option "ZAxisMapping" "4 5"
(**) Configured Mouse: ZAxisMapping: buttons 4 and 5
(**) Configured Mouse: Buttons: 9
(II) Synaptics touchpad driver version 0.14.6 (1406)
(--) Synaptics Touchpad auto-dev sets device to /dev/input/event3
(**) Option "Device" "/dev/input/event3"
(**) Option "SHMConfig" "true"
(**) Option "HorizScrollDelta" "0"
(--) Synaptics Touchpad touchpad found
(**) Option "SendCoreEvents" "true"
(**) Synaptics Touchpad: always reports core events
(II) XINPUT: Adding extended input device "Synaptics Touchpad" (type: MOUSE)
(II) XINPUT: Adding extended input device "Configured Mouse" (type: MOUSE)
(II) XINPUT: Adding extended input device "Generic Keyboard" (type: KEYBOARD)
Synaptics DeviceInit called
SynapticsCtrl called.
(II) Configured Mouse: ps2EnableDataReporting: succeeded
Synaptics DeviceOn called
(--) Synaptics Touchpad auto-dev sets device to /dev/input/event3
(**) Option "Device" "/dev/input/event3"
(WW) Synaptics Touchpad can't grab event device, errno=1022
(--) Synaptics Touchpad touchpad found
Could not init font path element /usr/X11R6/lib/X11/fonts/misc, removing from list!
Could not init font path element /usr/share/fonts/X11/cyrillic, removing from list!
Could not init font path element /usr/X11R6/lib/X11/fonts/Type1, removing from list!
Synaptics DeviceOff called
(II) Open ACPI successful (/var/run/acpid.socket)
Synaptics DeviceOn called
(--) Synaptics Touchpad auto-dev sets device to /dev/input/event3
(**) Option "Device" "/dev/input/event3"
(WW) Synaptics Touchpad can't grab event device, errno=1022
(--) Synaptics Touchpad touchpad found
(II) Configured Mouse: ps2EnableDataReporting: succeeded
---

So I think the relevant point is this: 

(WW) Synaptics Touchpad can't grab event device, errno=1022

Here some details: 

# cat /proc/bus/input/devices
I: Bus=0017 Vendor=0001 Product=0001 Version=0100
N: Name="Macintosh mouse button emulation"
P: Phys=
S: Sysfs=/class/input/input0
H: Handlers=mouse0 event0 ts0
B: EV=7
B: KEY=70000 0 0 0 0 0 0 0 0
B: REL=3

I: Bus=0011 Vendor=0001 Product=0001 Version=ab54
N: Name="AT Translated Set 2 keyboard"
P: Phys=isa0060/serio0/input0
S: Sysfs=/class/input/input1
H: Handlers=kbd event1
B: EV=120013
B: KEY=4 2000000 3802078 fb40f001 7effffdf ffefffff ffffffff ffffffff
B: MSC=10
B: LED=7

I: Bus=0010 Vendor=001f Product=0001 Version=0100
N: Name="PC Speaker"
P: Phys=isa0061/input0
S: Sysfs=/class/input/input2
H: Handlers=kbd event2
B: EV=40001
B: SND=6

I: Bus=0011 Vendor=0002 Product=0007 Version=0000
N: Name="SynPS/2 Synaptics TouchPad"
P: Phys=isa0060/serio1/input0
S: Sysfs=/class/input/input3
H: Handlers=mouse1 event3 ts1
B: EV=b
B: KEY=6420 0 70000 0 0 0 0 0 0 0 0
B: ABS=11000003

I: Bus=0011 Vendor=0002 Product=000a Version=0000
N: Name="TPPS/2 IBM TrackPoint"
P: Phys=synaptics-pt/serio0/input0
S: Sysfs=/class/input/input4
H: Handlers=mouse2 event4 ts2
B: EV=7
B: KEY=70000 0 0 0 0 0 0 0 0
B: REL=3

I: Bus=0019 Vendor=0000 Product=0002 Version=0000
N: Name="Power Button (FF)"
P: Phys=ACPI_FPB/button/input0
S: Sysfs=/class/input/input5
H: Handlers=kbd event5
B: EV=3
B: KEY=100000 0 0 0

I: Bus=0019 Vendor=0000 Product=0005 Version=0000
N: Name="Lid Switch"
P: Phys=PNP0C0D/button/input0
S: Sysfs=/class/input/input6
H: Handlers=event6
B: EV=21
B: SW=1

I: Bus=0019 Vendor=0000 Product=0003 Version=0000
N: Name="Sleep Button (CM)"
P: Phys=PNP0C0E/button/input0
S: Sysfs=/class/input/input7
H: Handlers=kbd event7
B: EV=3
B: KEY=4000 0 0 0 0

I: Bus=0011 Vendor=1014 Product=5450 Version=0001
N: Name="/usr/sbin/thinkpad-keys"
P: Phys=
S: Sysfs=/class/input/input8
H: Handlers=kbd event8
B: EV=3
B: KEY=3 1 20000000 100000 e0000 0 0 0


# udevinfo -a -p `udevinfo -q path -n /dev/input/event3`

Udevinfo starts with the device specified by the devpath and then
walks up the chain of parent devices. It prints for every device
found, all possible attributes in the udev rules key format.
A rule to match, can be composed by the attributes of the device
and the attributes from one single parent device.

  looking at device '/class/input/input3/event3':
    KERNEL=="event3"
    SUBSYSTEM=="input"
    DRIVER==""
    ATTR{dev}=="13:67"

  looking at parent device '/class/input/input3':
    KERNELS=="input3"
    SUBSYSTEMS=="input"
    DRIVERS==""
    ATTRS{modalias}=="input:b0011v0002p0007e0000-e0,1,3,k110,111,112,145,14A,14D,14E,ra0,1,18,1C,mlsfw"
    ATTRS{uniq}==""
    ATTRS{phys}=="isa0060/serio1/input0"
    ATTRS{name}=="SynPS/2 Synaptics TouchPad"

  looking at parent device '/devices/platform/i8042/serio1':
    KERNELS=="serio1"
    SUBSYSTEMS=="serio"
    DRIVERS=="psmouse"
    ATTRS{resync_time}=="0"
    ATTRS{resetafter}=="5"
    ATTRS{resolution}=="200"
    ATTRS{rate}=="80"
    ATTRS{protocol}=="SynPS/2"
    ATTRS{bind_mode}=="auto"
    ATTRS{modalias}=="serio:ty01pr00id00ex00"
    ATTRS{description}=="i8042 AUX port"

  looking at parent device '/devices/platform/i8042':
    KERNELS=="i8042"
    SUBSYSTEMS=="platform"
    DRIVERS=="i8042"
    ATTRS{modalias}=="i8042"

  looking at parent device '/devices/platform':
    KERNELS=="platform"
    SUBSYSTEMS==""
    DRIVERS==""

Kernel is: 2.6.20-15-generic

The strange thing is: When I boot my old kernel from 6.10 (2.6.17.11) then the touchpad works (without any other change). So maybe this is not related to the X-Package.