For FTB Ultimate 1.1.2 (Minecraft 1.4.7):
M is by default mapped to the Mini Map options. Try to move this to another key. (Open Mini Map options, go to Controls ... and select another key.)
You should see then the message "Lossless Mode enabled" when holding M and rightclicking with the wrench selected.
Beta 152wgt (Minecraft 1.5.2):
It has the latest GregTech addon with the automatic lossless mode for the wrench. I've never used the version without GregTech (152ngt), but there it should still work with M + rightclick.