I recently encountered problem with native touch screen support with Windows 7. I admit I shrinked a lot of stuff including Winsxs and such making installer even small enough to fit in CD. It works with wifi and infared without trouble though. However, it doesn't detect touch feature when I put Acer T230H in. I found devices getting updated in device manager but no touch screen support.

My current guess I removed Snipping Tool that caused this but I'm not really sure if there's any other cause. I made it as Starter Edition for keeping things smaller with lowest hassles. I'm not sure if Starter Edition will also cause this because it doesn't come with tablet pc but it should work fine according to report with touch screen monitor.

Any idea to solve this problem besides Snipping Tool?

Touch isn't available on Win7 Starter or Home Basic - you must have Home Premium, Professional, Enterprise, or Ultimate to get touch. The drivers will install, but the Windows binaries necessary for it to work aren't installed on those versions.