This article explains how to turn off  touch feedback (animated circles) from touches in Windows 7

Please see the procedure below to turn off touch feedback in Windows 7.

To hide the “water-drop” rings that are animated around each screen touch:

In the Windows 7 Group Policy Editor, enable the Setting: Turn off pen feedback.

The selection is User Configuration - Administrative Templates - Windows Components - Tablet PC - Cursors

To stop the animation, the setting ‘Turn off pen feedback’ needs to be Enabled to disable this function.