How about a “paging” option that instead of building a pager and only showing ONE page of data at a time, you hook into the scrollbar and whenever the user scrolls
The problem with the current implementation in jqGrid is that the scrollbar does not indicate to the user the position within the current table, nor the table's full size. If one page of data is loaded, then the scrollbar only shows that the table is only one page long, whereas the backend might have hundreds of pages. With this behavior, you are not able to reach the last page of the data just by dragging the scrollbar's cursor. The only way to get to the last page of the data is by scrolling to the end of the currently loaded data, waiting for the next page to load, scrolling again to the end of table, waiting,… repeated until you finally reach the last page.
Yahoo Mail uses an appropriately sized gif image to force the proper scrollbar on the right. This way, even if you one one page loaded in the table, the scrollbar shows that the entire dataset is much larger, and you may scroll to the real bottom of the dataset.