I used the stock ROM for a while before I took the jump to custom ROMs, and finally Mighty Rom 5...But anywho, yes, the stock ROM does wake up the device when the stylus is removed. You may want to remove the stylus and make sure that there is still a little black switch there on the phone inside where the stylus goes. See attached photo for reference. I believe it was my second Touch Pro that I lost the stylus switch on, and was wondering why the screen wouldn't turn on.
