After another night with the battery out and fresh start, I found that the entire column of my touch screen was unresponsive - meaning from the menu icon all the way to the top of the screen. My solution was to go to the Verizon store this morning and use my eligibility for upgrade to the Droid X.
Best decision I could have made seeing that I was out of warranty and live in an area that will not have 4G LTE until 2013. You can try all the other goofy tricks mentioned in this thread, which I did most of minus sticking it in rice (WTF)! My screen started jumping with no environmental changes or app installs/updates. The defect is with the touch screen itself or related processor.