I also have the same problem. Here's a thread that gave me some ideas, I'm looking to go home and fix it later today
TouchScreen Drivers & Installation
My lilliput was working fine before, but I suspect the bootskin program that I had corrupted my winxp and I had to "boot to the last known good condition" after that the lilliput touch screen stopped working. The device manager only reports "USB Device Not Recongnized" but error indicator.
After reading the thread above, I suspect it's a com port error. It sounds like lilliput only likes com port 1, 2 or maybe 2, 3. I need to figure out what's occupying these com ports on my machine.