I own a Toshiba Satellite A205-S6806 laptop that I recently upgraded from the default operating system install of Vista to Windows 7 (32 bit). During the upgrade, I was able to successfully install all of the Windows Updates but one caused me problems, specifically a display upgrade for the Mobile Intel(R) 965 Express Chipset Family Driver (I was unable to determine the Microsoft KB number for the update). When I reboot, the display assumes a very low resolution and the touchpad becomes disabled. Through use of the keyboard as a mouse, I was able to enter the Device Manager and observe that the touchpad driver had a "code 10". I was able to uninstall and delete the touchpad drivers using the keyboard as a mouse. Then I rebooted to allow Windows 7 to search for the touchpad drivers upon reboot. After reboot, the good normal screen resolution returned and the touchpad functioned properly. Problem though is that a new dialog box immediately appears saying the system needs to be rebooted for settings to take into effect, and old low resolution and "code 10" touchpad problems reappear after the reboot. I rolled the restore point back before the display update, hid the display update, and disabled Automatic Updates until I can resolve this problem.
I suggest you to try loading the latest generic driver for the Mobile Intel(R) 965 Express Chipset Family controller, posted here:
Also load the latest driver for the touchpad being used.
If the issue persists I would suggest you to do a fresh install from scratch not an upgrade and check with the laptop manufacturer.