I have the same problem. Just want to add, that it is possible to make
touchpad usable permanently at startup with this command:

gconftool-2 --set --type boolean
/desktop/gnome/peripherals/touchpad/touchpad_enabled true

However, keyboard problems still appear when I use touchpad on/off
button (hp DV6500). Once I press this button, mouse moves, but doesn't
click (inc. right/left click) on gnome related GUI desktop elements
(gnome-panel, desktop). But strangely it does click on Avant window
manager dock icons. Keyboard typing doesn't work, but again strangely
some keyboard short-cuts seem to work e.g. ctrl+alt+backspace (xserver
restart). I personally believe it is something deep and I would avoid
using random workarounds which doesn't fix the root of the problem. Also
there may be no problems with synaptic, because live CD works fine for
me. I turn on and off my touch-pad without loosing keyboard
functionality or having other crashes. This may be related to updates
originated after official release of Ubuntu 10.04, including new kernel
updates.

-- 
Keyboard does not work when touchpad disable button pressed
https://bugs.launchpad.net/bugs/571638
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