The compiling and installation procedure differs a bit from the common procedure.
Read the following steps:
1. Go to the unpacked directory.
2. Run: ./configure
3. Run to compile: make
4. Run (as root) to install: make install
5. Go to the directory keytouch-config by running: cd keytouch-config
   ... and repeat steps 2-4.
6. Go to the directory keytouch-keyboard in the unpacked directory by running: cd ../keytouch-keyboard
   ... and repeat steps 2-4.

NOTE: If you are using Ubuntu (or another sudo using distribution) open keytouch-keyboard/keytouch-keyboard in your favorite text-editor and replace "gksu" by "gksudo".