First, you are correct that the traditional "old school" scanners will not work well in this area. Even the relatively recent Uniden HomePatrol and BCDxxx series scanners from Uniden and the Whistler TRX series are not going to work since it's a Simulcast system (the marketing brochures may say they work on P25 systems but they will not work well on the Madison area ones unless you're in just the right spot).
To monitor these systems reliably, you're looking at at least a $500 investment here, even for a used unit. Assuming that's ok with you.....you really have two choices - the Unication G5 and the (brand new) Uniden SDS-100.
I can say the Unication G5 works great on this system. It's not cheap (about $600). Also it's a pager and not technically a scanner (it's a commercial grade, waterproof, rugged unit and meant for firefighters/EMS to monitor a small number of channels) but the reception is awesome on both DaneCom and the Madison Public Safety P25 systems. You can confidently be almost anywhere in Dane county and pick up everything with 100% copy with this thing.
With the G5, you just have to program the unit with your PC (not a huge deal) and get good at flipping the 8-position knob when you want to change what the unit is pulling in and it's great. For instance, I usually listen to the main dispatch channels on DaneCom (Dane County Sheriff, Madison PD) on one knob position which pulls in most all traffic, and if an incident is going down, turn the knob and switch to tactical or local channels which monitor a smaller number of talkgroups to filter out the others. There is no button to "hold" on a certain talkgroup like a scanner might have - however you could program one of the knob positions to have only a single talk group and accomplish more or less the same thing (hope that makes sense).
It would be nice if the Unication had some scanner like features but honestly I believe it's the only unit with good reception on this system in the $600 or less price range, besides possibly this new SDS-100 unit (see below)
SDS-100 looks promising and is a scanner in the traditional sense and supposedly can pick up the Danecom/Madison P25 systems, but it is brand new and the reviews are mixed. It's also much physically bigger than the G5 and won't fit in your pocket like the G5 does. Haven't seen an in depth review of the SDS-100 in Madison area yet and I'd personally hold off on getting one until someone can run one side by side with a G5.