cannot unlock iPod Touch

I recently received an iPod Touch. After charging it, I tried to use it, and the first thing it did was say "slide to unlock". However, it did not seem to react to my touch, nor the touch of my four roommates. I also tried turning it off, but it wouldn't sense my touch to slide the bar.

I tried holding down the power and square button and turned it back on, as well as restoring it to the original state, but neither worked.

Is there some sort of secret to unlocking it the first time, or did I just receive a faulty unit?