one thing i noticed in my problem with my 8'' lilliput was that the newest drivers do not install everything necessary for your touchscreen to work.
after you install the newest drivers, windows should still say something along the lines of "new hardware found, touchkit screen"......the new device wizard should pop up and you have windows install the necessary drivers automatically (the recommended option).
it should say drivers installed successfully and it should work immediately at this point.
edit- also make sure the original driver disk that came with your lilliput is NOT in your cd drive at the time windows is updating your drivers automatically, as it will pull the drivers from the cd and not work correctly. In fact, you don't need the original driver disk for anything