Sorry, I have no solution, but this is basically the same thing I've experienced. Sometimes the touch screen works; sometimes it doesn't. Disabling, then re-enabling the HID device in Device Manager would often make it work again. You might have found that others reported the same issues on Asus' forum. I'd found XP drivers from Pan Jit, but while they seemed to eliminate the screen dropouts, the BSOD occurrences increased. It didn't drive me nuts nearly as much as the fact that my wireless would pop out of Device Manager whenever I tried to use it in Vista (for some reason, Jenneth of Pocketables and Warner Crocker didn't have this problem; I have wondered if it's because they were installing Vista Ultimate, while I had Vista Business, but I've not checked it out, yet). I have installed Vista Business three times with the same results. I'm debating trying Ultimate, but I have only one precious license, and that is intended for a desktop that can make full use of it.
My R2H came back from my 208 BIOS fiasco in December, and I haven't installed Vista a fourth time. I'm sure it's just a matter of time.