This is really one of those 'may as well try' solutions that will really only help lazy people like myself. So my dad got me a brand new Harmony Touch remote - not the big square slate, but the one that they just released in 2012 that's more like a regular Harmony remote with a touch screen in the middle:
So I brought it home, opened it and it looked really nice. I was able to hook it up, setup a new myharmony.com account, import my old harmony one settings - and program the remote. All the physical buttons worked out fine too - but the touch screen itself was crazy slow, buggy, and sometimes completely unresponsive. I tried resetting the remote, powering it on and off - but still the touch screen was horrid.
I logged a support ticket with logitech - but decided - rather than, wait - at least I should try exchanging it. So I exchanged the remote for another one - and huzzah - the touchscreen was fine. So it looked like a manufacturing defect. Rather than waste your time searching forums, trying firmware updates, and resets - try the easiest thing first and exchange your remote.
Again - not brain surgery - but lazy people like me hate dealing with the hassles of returns and exchanges. So hopefully this helps some peeps.