The mouse pointer will lag and not follow your touches if your cycles setting is set anywhere near max. Cut the cycles down so dosbox only uses 50% cpu and the mouse should follow your stylus.

Also, the mouse will 'lose sync' and no-longer track if you tap beyond the dosbox display window, in the current build.

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The Z: drive is reserved for DOSBox internal programs. To mount another drive IN DOSBox use
or similar, depending where you store your dos programs. You can add this command to the end of your DOSBox config file.

The rover.sys should be stored somewhere visible to DOSBox, for example where you mounted the D: drive. You can also add the keyb command to your dosbox config to automatically run it, (or any other DOS command.)