Since the screen uses most of the space, the guitar doesn't have its usual controller. Instead, Cyberpyrot--who did the mod--added a magnetic switch under the body so he could use a magnetic pic to play the guitar. Cyberpyrot told that "yeah, it plays better but unfortunately I don't."
The touchscreen itself mirrors the action on the TV and something else: it allows you to control the whammy bar by sweeping your fingers across the screen.
The mod took "about 3 days to make, and it wasn't really expensive: $108 for Guitar Hero III, $77 for the LCD, $44 for the touch panel and about $30 for miscellaneous items."
According to Cyberpyrot, the next phase is to "add optics to the guitar so it can play itself," getting perfect scores and probably opening a breach in the time-space continuum which will destroy the Universe.