I dropped my iPod too and half of the screen wouldn't sense anything (occasionally the sensors wouldn't work at all). I tried turning it off and on again and even resetting it, but nothing worked. Once I got my iPhone I just threw the iPod in a drawer and forgot about it until recently when I found it again. Anyway, whenever the screen starts jumping around or the touch just wont work, I just drop it on the table or slap it against the palm of my hand and that seems to help for a little while.