damianno01, I know that issues with the virtual keypad and touch screen can be frustrating. This can cause a customer to be upset because every function can be initiates through the home key, so I truly know what you’re going through. I have researched this problem, in more detail and found customers have reported it as a known issue and we are working on a resolution. Currently a master/factory reset has worked for resolving this issue. I first want you to try putting your phone into safe modebefore performing a factory reset. Safe Mode temporarily disables all applications that have been installed via the Android Market. Performing this troubleshooting step can determine whether a 3rd party application is the cause of an Operating System issue. The steps are below to enable and disable safe mode. Once this is done, if it does not resolve your issues, you can perform a master/factory reset.
I have listed the steps along with a link below for performing a master/factory reset.