The way I read it (and how I plan to rule it as a player in my game is thinking of taking this feat) is that you can only heal people up to half HP's. So even if the spell gives them more hit points than half their total, the excess HP's are lost.
Example - The Fighter is at 39 out of 80 hit points. The Cleric has a 5th level Healing spell available. The Figher is healed up to 40 hit points, and not 54 hit points.
The other question I have with this feat is this:
Can a Cleric who is able to spontaneously convert prepared spells to cure spells able to use the Touch of Healing feat if he has spells prepared still available to cast, but none of them are Conjuration (Healing)? (i.e. he could convert one of his spells to Conjuration (Healing) if needed but doesn't have one prepared as such) I would say that he is able to use the feat, but I can see how some DM's might rule otherwise.
Olaf the Stout