Here is a link to the touchscreen i purchased:
https://www.adafruit.com/product/2407
I am running Jessie Lite (terminal only)
I powered the pi via the official pi adapter (wall adapter) and the display is usb powered.
The display is not faulty. The touchscreen works when its used as a mirror monitor on my laptop.
The pi zero is not faulty (hardware) (i don't think) because I can connect to my television (with the help of force_hdmi_hotplug=1 in the config file, previous to this the pi was not detected when plugged into the TV).
While I had the TV going as a display i did:
sudo apt-get update (several updates)
sudo apt-get install (no packages installed)
The only time the touchscreen kind of worked with the pi zero was when I had it plugged into the TV and it had already booted (was at login prompt), then unplugged the cable from the TV and plugged it into the touchscreen. I got some sort of image on the display but it was unreadable. It was basically the output image being doubled horizontally. This may have to do with the resolution differences between the TV and the touchscreen (touchscreen is 800x600).
Here is a picture of what that looked like on the touchscreen:
http://imgur.com/a/OWWYJ?
(the image was too large to post inline)
I'd like to get this touchscreen working as soon as possible so I can move onto projects. Thanks for your help in advance.