Best answer -
Ry Guy (Google Employee)
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Hello everybody,
I'm dropping in to let you know that we are still investigating the problems some of you are having with the touchscreen. Getting to the root of a problem like this can be very difficult because there are a variety of things that could be the potential cause.
Some of you may have seen the touchscreen behaving strangely because of the way you are holding the phone. Please make sure you aren't touching the screen in two places when gripping the phone. If you are trying to register a touch and another part of your hand (or your sleeve even) is also touching the screen it won't work!
If this turns out to be a software issue, we will attempt a fix via an OTA update. For now, completely turn off your Nexus One and then power it up. This typically stops any strange touchscreen behavior.
Lastly, a small percentage of you probably have hardware issues. This is likely the case if entire areas of your screen have become permanently unresponsive. In this case, view the warranty details in our Help Center and contact HTC for support.
Thanks for your continued patience as we work to sort this out, it is hugely appreciated!
-Ry Guy