The Home button is the only physical navigation input you'll find on the Kindle Touch. For most folks, it serves no other purpose than to return you to the home screen. But if you're a Kindle aficionado, the Home button can also be used to generate screenshots. Just hold it down for three seconds, tap on the screen, and then release the Home button.
As you can see from the video, the E Ink-based touchscreen isn't as fast as the LCD you'd get on a tablet, but that's to be expected. E ink relies on charged microscopic capsules in order to generate images, and its refresh rate directly correlates to the time it takes to charge electrodes and move those capsules. This process doesn't take a few milliseconds as it does on an LCD-based display. Rather, the lag is in the hundreds of milliseconds.
The Kindle Touch simply adds an infrared touch sensor to an E Ink Pearl display, which has a slight impact on input lag because the sensor has to detect and process your touch input before the screen refreshes. Overall, you're looking at somewhere between 50-100 ms higher response delay on this product compared to the nontouchscreen version.
If you're used to buying e-books on your Kindle, you'll find that very little has changed with that experience. The interface is tweaked a bit to make touch navigation easier. Labels and links are more evenly spaced apart, and buttons are larger so that the touch sensor doesn't confuse your selection.