The problem with touhscreen UIs IMO is that, for the most part, they start off on the wrong premise: emulate a traditional PC UI and then work around the stuff that doesn't work the same.

I say it's time to forget that nonsense and design from scratch. Fight legacy UI encroachment as much as possible, by default. Maybe my wild suggestions so far won't work with the hardware in question, but that's still no reason IMO to be bound by an approach that may not be best.