Excellent instructions for the Terminal trackpad preferences fix. This fixed it and it works great!
I used Migration Assistant to move a user from a 12" 1 Ghz PowerBook G4 with 10.5.6 (using iScroll2) to a new MacBook 2 Ghz aluminum with 10.5.6. After importing, vertical two finger scrolling on the MacBook was working, but horizontal scrolling was not.
2 finger scrolling was working on the MacBook before importing the user, so Migration Assistant probably brought over a preference file from the PowerBook with the wrong setting.
Checked the MacBook's setting for read -g com.apple.trackpad.scrollBehavior setting before changing, and it was set to 1 (not 0 or 2). But after changing the number to 2 per instructions, it works great. I wonder if 0 = off, 1 = vertical only, 2 = vertical and horizontal enabled? So perhaps before changing the setting, check what it was previously, if it was 2 already, the problem is probably something else.
Also, users migrating from another computer should check to make sure that iScroll2 is removed from their new system. iScroll2 said it was disabled (not Intel compatible) in System Preferences after the migration, so then we manually removed it. According to the uninstall for iScroll2 some of the files were located in
/System/Library/Extensions/iScroll2.kext
/Library/PreferencePanes/iScroll2.prefPane
/Library/Preferences/name.razzfazz.driver.iScroll2.plist
/Library/StartupItems/iScroll2
/usr/local/bin/iScroll2Daemon
/Library/Receipts/iScroll2.pkg
Also had to unpair the Apple TV remote from the laptop.
Thanks for the great tip!