I tried removing the battery and then rebooting, the touchscreen remained the same.
I tried this:
With the device turned off, simultaneously press the Volume up and Volume down key, and then press Power . When an exclamation mark appears, press the Home key to reboot.
The device wouldn't show me an exclamation mark.It was just showing on the screen:"Samsung: www.samsungmobile.com" then it shows " gt i5500" and a little bit lower "Samsung" and the display stays that way, doesn't do anything but reboots itself after a while.
I read somewhere it helps having the battery at 100%, not any lower. I'll retry after recharging.