It needs to be IMPS/2 so, yes, go ahead and edit the file.
IMPS/2 is the normal PS/2 protocol, plus wheel support protocols. I believe it stands for IntelliMouse PS/2, since MS developed the wheel mice protocols for their IntelliMouse line, but I'm not 100% sure.
The ZAXIS line, which you already put in, is also needed.
[ October 30, 2002: Message edited by: M. O'Brien ]