Zoom capability gone
Apple changed this default behavior in 10.8 Mountain Lion.

To re-enable the behavior you're accustomed to:


Open System Preferences
Click on Accessibility
Click on Zoom
Check the box next to "Use scroll gesture with modifier keys to zoom"
optional - You can change the modifier key (control by default) that is used in the dropdown box below


From a support perspective I can understand why Apple disabled this.  I've personally helped probably upwards of 20 people who have inadvertently zoomed in and have not known what they did or how to undo it.  I can only imagine that AppleCare phone support gets many calls about this, which I'm sure is difficult to figure out based on the descriptions people give.

Changing the default behavior would kill off the majority of those calls for new 10.8 users who have no idea what the feature is for while leaving the option there for those of us that use it from time to time.

Hope that helps!