My back, menu, home, and search buttons are not working correctly... Problem with UD 3.1.1 or is my phone on its last legs?
this CAN be a hardware problem... the touch screen will lose its sensitivity in due course, unfortunately. but, there are plenty of other things that can cause it to behave like this. for instance, dirty, moist or cold hands will not react as readily with the capacitive touch screen as well as clean, dry, warm hands will. also, as was said before, a dirty screen can mess it up a little.
also, did you wipe completely before the install? meaning formatting /system, /data, /cache a FEW times each, AND wiping dalvik-cache? if not, try a FULL wipe and reinstall. if it still doesn't work, re-download the file and try again using a full wipe. there are plenty of things to troubleshoot before blaming the hardware