I don't really know how it got cracked but it's cracked!! Now that it's cracked it wacks out like when I type different stuff! It won't do anything I want it to!
You need to replace the crystal & touch sensor.
Take it to the Apple store. They may do it for free or they may not. If they won't do it for free depending on where you live you may be able to find someone local who will do it for a lot less than Apple.
Otherwise there are many place that will do it through the mail. If you are handy and ambitious you can also try ordering the parts and doing the replacement yourself.