Seems no one has the same problem as I have. So I will give you an update on the situation:
I installed the UB 1.6.4 version of the Griffin PowerMate software. That went OK and then I plugged the PowerMate in, that went OK too and the knob works. But when I shutdown it panics! so I tried some variations first I just unplugged the PowerMate and then shutdown... and it worked fine no panics
Then I decided to go to my Apple reseller and ask him to test it, he actually just sat me down in front of another Mac Mini Core Solo 1.5GHz and said I could do what I wanted! I thought that was pretty good stangely the PowerMate worked on the shop's Mac Mini. So I have come to the conclusion the the PowerMate is incompatible with my configuration.
Now I have 2 external devices plugged into the USB ports: 1 is the touch screen, the other is the griffin RadioShark. I suspect very strongly that the UB version of the Touch Screen from www.newision.com is conflicting with the UB version of the PowerMate software/driver.
If anyone has a Mac Mini Core Solo 1.5GHz coupled with a Touch screen and a PowerMate and the setup works sucessfully can he/she tell me as I would be very interested to find a solution to my problem.