I've got fake multi-touch going. Basically look for SDL key events, and dispatch a fake SDL mouse event to some very specific screen coordinates. I set the SDL flag telling it to be mouse number 2. I mapped the arrow keys (looks like pre doesn't have arrows) to onscreen d-pad, and just played through the first level of Earthworm Jim since it was said to be impossible without multitouch. I don't think there's any way to map the keys up correctly without some kind of per-game configuration. I tried NOVA, but the mouse has to be slid to take effect, I'll try and get that working next.

Edit:
Yep, NOVA can work too, just fake a mouse motion event. I wonder if we overlaid every d-pad based game, is there any chance we could find one set of coordinates that would hit every one of the buttons in each game? For example if a screenshot were taken of earthworm jim, and one of nova, overlaid on top of each other, then adjust opacity, is there a chance the up keys would have at least one pixel in common?