touchpad-indicator didn't work for me, so I wrote a little script to do it instead, and bound it to a shortcut key (Ctrl-F1).
it's a wee Python script, only a dozen lines, just sharing it in case anyone else finds it useful:
grab the code from: https://gist.github.com/1336648
/usr/local/bin/toggle_touchpad.py, eg by opening
gksudo gedit /usr/local/bin/toggle_touchpad.py
and pasting the code in.
sudo chmod +x /usr/local/bin/toggle_touchpad.py
then, go to settings-->keyboard-->shortcuts-->custom shortcuts
add a new shortcut, call it eg toggle touchpad on/off, and give the command as
Click OK, then click on the new row. Now click where it says "Disabed" in the new row, it will say it's waiting for a new shortcut key. I chose
important: then log off and log back on again
voila! feedback, comment, suggestions appreciated