Is there a way to make my HTC-Incredible phone use the optical joystick button to wake up?
This should actually be pretty easy and does not require rooting or custom ROMs, but you'll need a 'lockscreen replacement' app to do it.

The app 'WidgetLocker Lockscreen' allows 'Easy Wake' that allows you to customize which button (Home, menu, trackball, volume, etc) wakes the phone. Check it out on the market, it's $1.99.

There may also be other lockscreen replacement apps out there, but that is exactly what you need: a customizable lockscreen replacement app that supports the feature you requested. WidgetLocker is an example of this.