SOLUTION!!!
I have been reading up on this for a while here is where I found the solution:
http://h30434.www3.hp.com/t5/Hardware/TM2-Touch-screen-delay-issue/td-p/221136
go to Device Manager (start > run > devmgmt.msc)
Expand the human interface devices category
Right click the first USB input device, goto properties
Select the power management tab
Uncheck “turn off this device to save power”
I would assume that this isnt great for battery life but I dont see much point in a touchscreen that lags…