Rubberband selection and text selection not working in Debian Squeeze

I was playing around with Debian Squeeze and observed that rubberband selection and text selection is not working. The Debian Squeeze machine is a VirtualBox guest upgraded from Debian Lenny.

I suspected that this maybe caused by Gnome/gtk configuration that was messed during upgrade to Squeeze. Tried to install LXDE and still no dice, same issue observed. I was guessing then that this might be an xorg driver issue (vboxvideo) or mouse (vboxmouse). I started making adjustments to my xorg.conf and waalaah.... issue fixed.

This is a snippet of the original configuration:

Section "InputDevice"
       Identifier      "Configured Mouse"
       Driver          "vboxmouse"
       Option          "CorePointer"
       Option          "Device"        "/dev/input/mice"
       Option          "Protocol"      "ImPS/2"
       Option          "Emulate3Buttons"       "true"
EndSection

Changed it to:

Section "InputDevice"
       Identifier      "Configured Mouse"
       Driver          "vboxmouse"
       Option          "CorePointer"
EndSection

@timus@