Hello.
Did you happen to install a screen protector prior to the touch screen not working? If so, you may need to align the screen again. Go to Start|Settings|System|Screen and click the 'Align Screen' button.
If that doesn't help, I would suggest doing a backup with either Sprite Backup or SPB Backup, then hard-resetting the device. See
http://www.palm.com/cgi-bin/cso_kbURL.cgi?ID=41108 for more info on performing the hard reset.