How is it connected? Directly to the computer... through a USB hub, or through a USB extension cable.
If you hook it directly to the USB port w/ out hubs or extension cables does it work fine?
Have you uninstalled and reinstalled the driver and touchscreen software?
Has it ever worked properly? If so when, have you tried running xp's system restore to that point? (Start--> All programs --> Accessories --> System tools -->System restore) in XP and ME only
Have you installed any new hardware or software recently and if so what? if so remove it.
Also is it heat related?
I can go on forever but I think that this will keep you busy for a little while!!!