Available options from the trackpad are:
a) 2-finger up/down or left/right: Scrolling (vertical and horizontal)
(PS: You have to have the window active and the cursor on top of it to use the feature; i. e if you try to do it for a background window, it won't work. Also if you have a scrollable window inside another scrollable window(eg. Gmail compose window), move the cursor appropriately like the old synaptic touchpad. If you want to scroll the background window, use a free program called
WizMouse;
http://download.cnet.com/WizMouse/3000-18487_4-10907935.html) It is quite useful for comparing two documents, web pages etc side-by side whicout having to click each window again and again)
b) 2-finger pinch zoom in and out. This was tricky for me. I didn't like it.
c) 3-finger up/down: Switch/change the tab of your browser if you have multiple tabs open, say in firefox. Unlike the above option of 2-finger scrolling, I had to lift my fingers slightly after each 3-finger up/down to get it work. I mean, if I keep fingers in the trackpad and do up then down, it won't go switch between the tabs.
d) 3-finger left/right: Browser/Windows Explorer go backward or forward. Again lift fingers after each left/right.
e) 4-finger up: It's like Alt+Tab, but the window selection panel stays without disappearing so that you can tap (or move cursor) on the trackpad to select the window you want to change to.
f) 4-finger down: Shows desktop; similar to Windows key+ D
g) 4-finger left/right: Like Windows+Tab key combo. Open 3D window cycle panel with the perspective look. To cycle the windows forward, tap/swipe one(or more) finger keeping the other fingers on trackpad. (If you lift the fingers, the panel disappear zooming up the active window.) Each tap cycles to new window. When your cycle reaches the desired window, lift the four fingers, the window come up and become active for your use. I can't figure out how to cycle backward though; I mean Windows+Shift+tab option.
Now the main problem I faced was this one. When I actually want to scroll with two fingers, sometime it zooms in and out. If you have same problem, may be you can try disabling the zoom options so that you accidently don't zoom when you actually intend to scroll. If you ever need Zoom options, use keyboard shortcuts (Ctr+, Ctr-, Ctr0)
Control panel> Mouse> CypressTrackpad > Click to Change Cypress Trackpad Settings > 2-Finger Gesters
Uncheck Zoom In/out Rotate boxes
I did this fix and it's working perfect so far.
If you want to enable the old style single finger scrolling, you can do that too.

Hope this might be helpful to someone with the same problem. Please let me know if I'm missing something so that I can learn from you.
UPDATE (June 20th): I was going crazy before I figured this work around but now I'm starting to like this option. There is a small learning curve to master this gestures, but once you get used to it, it'll become very convenient for your everyday browsing (if you use touchpad a lot; not using mouse). May be you need practice for 5-10 minutes. I would suggest you to give it a try.
UPDATE (July 4th): I updated to the new Cypress trackpad drivers (v 2.3.6.5) and my experience went from awesome to awful. It gave me a frustrating 5-10 minutes of scrolling with jerky movements all the time. So I immediately restored to the old system state with System Restore. May be I'm missing something. I'm not sure whether the trackpad adapts and stores the usage behavior to give better performance? The driver version which I find working well is 2.3.6.3.
UPDATE (Dec 5th 2011): I accidentally happen to see Dell Reps response to my Dell XPS 15z review on Dell.com. The update is that there is a new driver available for Cypress Trackpad. I copy paste the response here if anyone want to try it out. I'm currently test driving the new drivers and so far it looks interesting. I'll post my feedback on Dell forum soon.
Thank you for the excellent and well considered review. We very much appreciate the feedback. I wanted to provide an update specific to the touch pad drivers. The latest driver reduces the CPU load to peaks of roughly 2% each and a maximum combined average over a 30 minute sample of 1.9% in a normal usage scenario. Please try out the new drivers and post on the Dell Forums if you have any feed back. http://www.dell.com/support/drivers/us/en/usgen1/DriverDetails/DriverFileFormats?DriverId=1GFT0
http://reviews.dell.com/2341_ng/xps-15z/dell-xps-15z-reviews/reviews.htm?reviewID=15509786