I am experiencing the same problem after updating from 10.04. I have applied the settings to /usr/share/X11/xorg.conf.d/10-evdev.conf as suggested in https://wiki.archlinux.org/index.php/Logitech_Marble_Mouse and this gives the required scrolling using the trackball, but the two-large-button middle-click merely gives a right-click effect.
I have appended the following settings ing 10-evdev.conf:
Section "InputClass"
Identifier "Marble Mouse"
MatchProduct "Logitech USB Trackball"
MatchIsPointer "on"
MatchDevicePath "/dev/input/event*"
Driver "evdev"
Option "ButtonMapping" "1 8 3 4 5 6 7 2 2"
Option "EmulateWheel" "true"
Option "EmulateWheelButton" "8"
Option "ZAxisMapping" "4 5"
Option "XAxisMapping" "6 7"
Option "Emulate3Buttons" "true"
EndSection
This maps the middle button click to either of the small buttons (8 & 9) and allows the holding down of button 8 (small left button) for the track-ball scrolling. While not ideal (I also prefer the two-large-button==middle-click) this might be a good enough compromise (I think it will be for me at least).
I would also suggest that the loss of Emulate3Buttons is a bug and should be reported. This setting worked fine with this mouse on 10.04.