I've been testing out the touchscreen and it works in directional mode, though I've noticed a few things.
1. If you pause and hit the on screen keyboard icon, you need to restart smartgear or the keyboard will keep popping up.
2. The touchscreen settings need to be set for each system and sometimes the mode doesn't stick at first.
3. Pressing the bottom center will sometimes register as diagonal down-right. Pressing slightly left of center, registers as down.
4. Fire button mode doesn't seem to work. It functions exactly like the default pause mode.
I will do more tests and provide more feedback.
If anyone is having problems, reinstall
Smartgear Pocket PC cab.
Don't change any default settings other than "video size". Fit2Win or Fit2Win* are the best. If the screen isn't properly rotated, simply slide the keyboard in, out until it fixes. Set Options>Touchscreen to "Directionals (white = pause)" if you want, but I find that the default keyboard control is best for most games.