I run Paldo 1.12 live CD in a notebook, and when the desktop is loaded I can't move the cursor with the Synaptics Touchpad.
In Paldo 1.11 live CD it works very well out of the box.

I've added a patch to xorg-server and hal which should fix this issue. The package build should finish in about half an hour. The next build of the live cd will have it included. You can also just run upkg-upgrade after the installation to update to the new versions.