I also cannot use the mouse wheel to scroll in the Tools Pallete, as the attention is always "stolen away" by the Front Panel / Block Diagram.
I would suggest that you simply resize your Tools Pallete to the desired dimensions in order to fit all the buttons on as to eliminate the usage of the scroll bar.
Anthony Wong University of Toronto Chemistry Department
Unfortuantely, the palettes are not set up to be scrollable from the mouse's scrollwheel. However, after reading this post I filed a product suggestion to R&D requesting that feature in a future version of LabVIEW. If you would like to submit one as well, you can do so here.