I try to fix these problems after compiled CWM for my device.
1 ) Touchscreen turned into touchpad.
2 ) Notification bar missing.
3 ) Softkey navigation missing
I had added 'qemu.hw.mainkeys=0' to build.prop
Not entirely sure what you mean by touchpad, sorry...
2 and 3 are most likely related.
Did either ever work?
1st, make sure of the obvious - that the Expanded Desktop option is not enabled.
You shouldn't have to add the setting to build.prop as it is built into the rom and might interfere with other troubleshooting steps.
What device are you building for?
Ahhh ok. I remember seeing something about that issue before, but having trouble finding the thread. Perhaps it's an option checked in the Developer Options in Settings? You didn't port the source from a tablet, perchance?
So it seems like you might be missing some modules or something along those lines. Like the phone doesn't recognize the touch parts so defaults to the circle method to get you around. I found some info for another device with this issue here:
http://xdaforums.com/showpost.php?p=48720567&postcount=504
The thread has some random info about it that maybe will be able to point you more in the direction of things to try and fix. Sorry I can't be of more help.
I try to fix these problems after compiled CWM for my device.
1 ) Touchscreen turned into touchpad.
2 ) Notification bar missing.
3 ) Softkey navigation missing
I had added 'qemu.hw.mainkeys=0' to build.prop