When the touch screen on a handheld device goes out, you're in big trouble. It pretty much turns your expensive electronic toy into a paperweight. Fortunately, with twenty bucks and about half an hour of your time, you can fix one of these yourself. I'm not sure what the insides of other handheld models look like, but the Palm TX was a very simple fix.
Just a quick disclaimer: I am not responsible for any damage you do to your device or warranty. There are plenty of little fiddly bits inside one of these things that can be easily damaged through carelessness or accident. Also, I'm pretty sure if you open one of these yourself you invalidate the warranty. You have been warned.
I forgot to mention, you should probably try PhilB
's instructable on the crazy digitizer problem
first--you may not need a new digitizer at all! It didn't work for me, but after I'd installed the new touch screen, the DigiFix program was better at calibrating the new screen than the basic software.
***UPDATE 5/4/10: If you've repaired your Palm using my instructable, go into the Notepad and write, "Thanks depotdevoid!" or something along those lines. Take a picture of it and post it to the comments below, and I'll send you a DIY patch!***