One of the features part of the new X Input extension
to be included in X.Org Server 1.12 is smooth scrolling support
Patches for smooth scrolling in the X.Org Server originally appeared back in June by Peter Hutterer, but the smooth scrolling patches have now appeared on the mailing list
once more. With X.Org Server 1.11 being out the door, the merge window for X.Org Server 1.12 is opening and so Peter has pushed out the patches for one final review before calling for them to be pulled into the mainline tree by Keith Packard.
More information about smooth scrolling support can be read on Peter's blog