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):
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.)
Section "InputClass"
Identifier "middle button emulation class"
MatchIsPointer "on"
Option "Emulate3Buttons" "on"
EndSection
The very annoying malfunction of a missing 3rd mouse button (touch pad, Marble Mouse) can actually be fixed with the
"gpointing-device-settings".
Just install using CLI with
sudo apt-get install gpointing-device-settings
Then invoke
gpointing-device-settings
to get the GUI window.
However, now I can use the unixish copy paste with mark and middle mouse button. At least in terminal.
And for the Marble Mouse Trackball there is a separate article with a lot of config details.
Hope it helps.
PS:
Do not miss this Ask Ubuntu answer
on:
Enable middle mouse for all users by changing the default value in /usr/share/glib-2.0/schemas/org.gnome.settings-daemon.peripherals.gschema.xml
or just look for the term in duckduckgo.
FF!!
addendum: Here is a rare and interesting text about how resolution of mice is handled:
Building a DPI Database for Mice
Aother excellent wrap up for the Marble Mouse / Logitech Marble Mouse Trackball is found here on the Ubuntu help wiki