iPhone touch screen not responding

Not sure what you mean by reset it to factory settings, was this a Restore in iTunes?
Have you tried to Reset it, i.e., hold down the sleep and home buttons, ignore the power off slider, when the Apple logo appears let go of the buttons.
If that does not work be aware you will have to replace your iPhone through Apple as it will not be covered under the warranty. Or you can try a 3rd party repair site.
MacPro Dual Core 2.66 Ghz, MacBook Pro 15", iPhone 3G Mac OS X (10.5.6) AEXs, Red 2G Nano, Red Shuffle, 160 GB Classic, White 60GB 5G, Apple TV

I reset it holding the buttons, and when that failed I reset it in iTunes.
It still doesnt work.
I have insurance for it though, so I could get it replaced. Im just hacked off that I cant read my texts and what not that are sitting waiting to be read.
Windows XP Windows Vista

Time to make a claim through your insurance company. Was this through your household insurance or a 3rd party? (Just curious, my insurance company wont cover my iPhone).
MacPro Dual Core 2.66 Ghz, MacBook Pro 15", iPhone 3G Mac OS X (10.5.6) AEXs, Red 2G Nano, Red Shuffle, 160 GB Classic, White 60GB 5G, Apple TV

Did you ever get it to work? Im having the same problem.
iMac intel 2.4 Mac OS X (10.5.7)