Application touch events not working after installing setup

Hello All,

I have created a Wpf application in VS 2010 (.NET Framework 4)
which is able to handle both mouse events and touch events. I have created a setup project for that and tried testing on several machine having Windows 7 as OS. But the application shows some strange behaviour.
It runs well on some machines but doesn't works on others. I didn't found any difference though. What may be the problem?

I found out that on changing the compatibility mode of the application to Windows XP SP2/Windows XP SP3, it runs well on those machines too.
Why this happens?

But then again a problem arises that touch event doesn't works in Windows XP SP2/Windows XP SP3 compatibility mode; since touch is not supported in Windows XP.

Now what should i do?
The application is to be supported on both touch and non-touch environment and requires Windows 7 as OS.
What is causing this?

Is there any settings while creating setup.

(the application setup is created through VS Setup Project).

Tags: C#, .NET, Visual Studio (Visual Studio 2010), WPF, Event