That's right, the middle mouse button doesn't do any of that. The thumb button turns into a Dragon, the other side button does nothing and the left and right buttons are select and move.
In Win 8 the default functionality of the middle mouse button is to call up an instant view of all windows, if I change this to middle mouse button the middle mouse does work properly. It's not an ideal solution of course but that is the root of the issue.
(As a side note if I change my other side button to middle mouse I can use it to change view, which is far easier)