When you view the library on the Touch, what format does it show for the book? In Library view the format should show up on the bottom line?
Have you been dropping the book before re-adding it? It's safest to drop the book either from the device itself, or via calibre but if via calibre be sure to eject the Touch before re-adding it.
PRC is not actually a format; PRC is a container and often would have contained MOBI format books.