Media engine will not work with an LCD like you describe. However, Winamp will work just fine! There are several plugins for it that control LCD's
I have a Nostromo (somehwere..can't find it...one of my 'buds' may have nicked it...), and the wheel is actually a throttle, not a scroll wheel...you get about 3/4 of a turn out of it. If I am not completely mistaken, there was a winamp plug someplace to control winamp with a joystick, including a plug to control volume with a throttle...if you can find that, then you're in business.