Touchpad not disabled while typing

Using Ubuntu 12.04 on a Dell xps 13 Developer edition (Ubuntu preinstalled)

Even if "Disable touchpad while typing" is selected under "Mouse and touchpad", the touchpad doesn't ever get disabled.

ProblemType: Bug
DistroRelease: Ubuntu 12.04
Package: xserver-xorg-input-synaptics 1.6.2-1ubuntu1~precise2
ProcVersionSignature: Ubuntu 3.2.0-48.74+kamal16~DellXPS-generic 3.2.46
Uname: Linux 3.2.0-48-generic x86_64
ApportVersion: 2.0.1-0ubuntu17.3
Architecture: amd64
Date: Fri Jun 28 10:14:25 2013
DistUpgraded: Fresh install
DistributionChannelDescriptor:
 # This is a distribution channel descriptor
 # For more information see http://wiki.ubuntu.com/DistributionChannelDescriptor
 canonical-oem-somerville-precise-amd64-20120703-2
DistroCodename: precise
DistroVariant: ubuntu
InstallationMedia: Ubuntu 12.04 "Precise" - Build amd64 LIVE Binary 20120703-15:08
MachineType: Dell Inc. Dell System XPS L322X
MarkForUpload: True
ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-3.2.0-48-generic root=UUID=d29c6305-adbd-454f-a4ab-992455a91d16 ro quiet splash vt.handoff=7
SourcePackage: xserver-xorg-input-synaptics
UpgradeStatus: No upgrade log present (probably fresh install)
dmi.bios.date: 01/22/2013
dmi.bios.vendor: Dell Inc.
dmi.bios.version: A07
dmi.board.name: 0PJHXN
dmi.board.vendor: Dell Inc.
dmi.board.version: A00
dmi.chassis.type: 8
dmi.chassis.vendor: Dell Inc.
dmi.chassis.version: 0.1
dmi.modalias: dmi:bvnDellInc.:bvrA07:bd01/22/2013:svnDellInc.:pnDellSystemXPSL322X:pvr:rvnDellInc.:rn0PJHXN:rvrA00:cvnDellInc.:ct8:cvr0.1:
dmi.product.name: Dell System XPS L322X
dmi.sys.vendor: Dell Inc.
version.compiz: compiz 1:0.9.7.12-0ubuntu1
version.ia32-libs: ia32-libs 20090808ubuntu36
version.libdrm2: libdrm2 2.4.43-0ubuntu0.0.1
version.libgl1-mesa-dri: libgl1-mesa-dri 8.0.4-0ubuntu0.6
version.libgl1-mesa-dri-experimental: libgl1-mesa-dri-experimental N/A
version.libgl1-mesa-glx: libgl1-mesa-glx 8.0.4-0ubuntu0.6
version.xserver-xorg-core: xserver-xorg-core 2:1.11.4-0ubuntu10.13
version.xserver-xorg-input-evdev: xserver-xorg-input-evdev 1:2.7.0-0ubuntu1.2
version.xserver-xorg-video-ati: xserver-xorg-video-ati 1:6.14.99~git20111219.aacbd629-0ubuntu2
version.xserver-xorg-video-intel: xserver-xorg-video-intel 2:2.17.0-1ubuntu4.4
version.xserver-xorg-video-nouveau: xserver-xorg-video-nouveau 1:0.0.16+git20111201+b5534a1-1build3