Turning off inertia or toggling any other setting will NOT correct this issue, as multiple other people have reported. I've tried everything, and a few times I thought I'd "fixed" it, but it always came back.
Thursday night I reinstalled OS X (clean install after a backup), ran software update and installed everything BUT the multi-touch update, and I haven't experienced the issue once - compared to multiple times a day, each day, since having previously installed the update. I sent this feedback to Apple, along with the previous data captured by the diagnostic software they sent me.
Soooo...if you must, as I did, a clean reinstall will restore your trackpad to working order.
PS - I had tried a "lazy" reinstall prior to the "clean" reinstall. It didn't work.