You said that you don't see anything in Device Manager ???
What does it show for "Mice and other pointing devices"...????
Does it show it as a PS2?? (It must show something!!).
I had similar problem with my Vaio FZ21E.
To get around it, I went to the Vaio website and logged in using my laptops serial number.
Once it recognised the model of laptop, I wnet to the download page for that specific model. opened up the tab for originally installed software, and at the bottom of the page was the original driver pack (all 113 mb of it !!).
Downloaded that to a temp folder and then opened device manager, right clicked on the PS2 mouse and asked windows to update the drivers from the C drive.
After a minute or so, Win 7 found everything it needed and I suddenly had a fully functioning touchpad.
If however the above doesn't fix it, go to the ALPS website and look for the following (or similar).
The drivers installed are - 7.0.501.8 (driver for Vaio) dated 23.05.2007.
Driver details frm ALPS Electric is file version 220.127.116.11
Let me know how you get on .