I’ve compiled a hacked version of the X11 Synaptics driver that includes a fudge factor for the Y component.  It does hw.y *= 0.6 internally, and this pretty much compensates for the incorrect coordinates.

Here’s a link to a modified replacement Ubuntu .deb package.

Just download that file, and then run:

dpkg –install xserver-xorg-input-synaptics_0.15.2-0ubuntu7_i386.deb

And you should be good to go.  If/when the Ubuntu maintainers publish a new or upgraded version of this package, this version will be overwritten, so you’ll be SOL.  So, be careful with those autoupgrades!

In other news, there are patches underway to do this in a more configurable way, and its possible that future versions of the Synaptics driver will include the ability to adjust the vertical sensitivity.