Custom Activity to mimic "Show Overlay Touches" for devices < 4.0.

touch.xml

<?xml version="1.0" encoding="utf-8"?>
<shape xmlns:android="http://schemas.android.com/apk/res/android" >
    <corners android:radius="25dp" />
    <stroke android:color="#7F00007F" android:width="1dp"/>
	<solid android:color="#7FFFFFFF" />
</shape>

TouchOverlayDemo.java

import android.app.Activity;
import android.os.Bundle;
import android.view.MotionEvent;
import android.view.View;
import android.widget.ArrayAdapter;
import android.widget.ListView;
import android.widget.RelativeLayout;

public class TouchOverlayDemo extends Activity {
	@Override
	protected void onCreate(Bundle savedInstanceState) {
		super.onCreate(savedInstanceState);
		final ListView listView = new ListView(this);
		listView.setAdapter(new MyAdapter());
		final View touchOverlay = new View(this);
		touchOverlay.setBackgroundResource(R.drawable.touch);

		final RelativeLayout.LayoutParams params = new RelativeLayout.LayoutParams(50,50);
		RelativeLayout relativeLayout = new RelativeLayout(this) {
			public boolean onInterceptTouchEvent(android.view.MotionEvent ev) {
		        final int action = ev.getAction();
				switch (action & MotionEvent.ACTION_MASK) {
	            case MotionEvent.ACTION_DOWN:
	            	touchOverlay.setVisibility(View.VISIBLE);
	            	break;
	            case MotionEvent.ACTION_CANCEL:
	            case MotionEvent.ACTION_UP:
	            case MotionEvent.ACTION_POINTER_UP:
	            	touchOverlay.setVisibility(View.INVISIBLE);
	            	break;
				}
				return true;
			};
			
			@Override
			public boolean onTouchEvent(MotionEvent event) {
				params.setMargins((int)event.getX()- 25, (int)event.getY()-25, -50, -50);
				touchOverlay.setLayoutParams(params);
				final int action = event.getAction();
				switch (action & MotionEvent.ACTION_MASK) {
	            case MotionEvent.ACTION_CANCEL:
	            case MotionEvent.ACTION_UP:
	            case MotionEvent.ACTION_POINTER_UP:
	            	touchOverlay.setVisibility(View.INVISIBLE);
	            	break;
				}
				listView.dispatchTouchEvent(event);
				return true;
			}
		};
		relativeLayout.addView(listView);
		relativeLayout.addView(touchOverlay, params);
		touchOverlay.setVisibility(View.INVISIBLE);
		setContentView(relativeLayout);
	}
	
	class MyAdapter extends ArrayAdapter<String> {

		public MyAdapter() {
			super(TouchOverlayDemo.this, android.R.layout.simple_list_item_1, android.R.id.text1);
		}
		
		@Override
		public int getCount() {
			return 100;
		}
		
		@Override
		public String getItem(int position) {
			return "Cell "+(position + 1);
		}
		
	}
}