By what I've managed to find out so far, the touchscreen is NOT MULTITOUCH. So it's not going to be like the iphone's(which is very good tough-sensitivity-wise). However I do own a Nokia tablet (with a touchscreen similar to the one Pandora will have) and I use a stylus usually for web browsing, zenmap,Debian Chroot, Abiword, etc etc... and it works totally fine that way on the 800:480 screen resolution. However it's not so good when using your fingers so the on-screen finger keyboard is crap to use.But it's fine lets say to use the A and B buttos in the touch screen while playing VGBA and it's quite ok when using the touchscreen for aiming in 3D FPS (like Duke Nukem, Doom, Quake 2).
In summary Pandora's touch screen is not going to be as good as the iPhones, so no multitouch, but it is PERFECTLY ACCEPTABLE since the Pandora has doesn't need an on-screen keyboard or on-screen gaming buttons.