I had the same issues using Ubuntu 14.10 and earlier:
Unix style copy paste in the terminal not working.
Disappointing default settings.
However, here is a solution (partly resembling a wrap up of my predecessors):
2) To fix the terminal issue I successfully put the following lines into my xorg.conf:
(see if /etc/X11/xorg.conf is suitable for you. May be different for Lubuntu etc.)
Identifier "middle button emulation class"
Option "Emulate3Buttons" "on"
1) The very anoying malfunction of a missing 3rd mouse button (touch pad, Marble Mouse) can actually be fixed with the
Just install using CLI with apt-get install gpointing-device-settings. Then invoke gpointing-device-settings to get the gui window.
Probably some steps need a sudo or root access. I assume you know.
However, now I can use the unixish copy paste by mark and middle mouse button. At least in terminal.
And for the Marble Mouse there is a separate article with a lot of config details.
Hope it helps.