Hmm, I don't like "upgraded" microsoft systems personally. You would be best advised to start with a fresh copy on a formatted hard rive of XP w/ service pack 3. BUT, if you don't want to do that, we will have to find another solution. Couple quick things, if you plug in a USB mouse or keyboard, does it work? I believe the 500 uses a USB internal interface for touch screen. Probably should check the USB and COM port device manager settings. Are there ANY yellow or red expanded devices listed in device manager? Like "Unknown Device" ?