I was dealing with the same problem - and have finally found the solution!!!
(it's not a simple one)
seems to me that the problem is that the driver does not allow for clicks while you are hovering (i.e. all the time with this stylus). gateway tablets have been suffering the same problem.
everything you've read and have been doing is part of the solution, but you need to change and recompile the driver.
download the source code, and edit xf86Fpit.c
find the line that reads "if (!prox) buttons=0;" and comment or delete the line (this stops buttons from functioning while hovering),
now, recompile! if it won't compile, it's because you have commented or deleted incorrectly.
make sure your xinitrc contains the following:
xmodmap -e "pointer = 1 3 2"
(the first will allow the modmap to change your stylus rather than your mouse, and the modmap will allow your button to be the right button, rather than the middle.)
at last - it works.