D&Dtools1

A ghost touch weapon deals damage normally against incorporeal creatures, regardless of its bonus. (An incorporeal creature's 50% chance to avoid damage does not apply to attacks with ghost touch weapons.) The weapon can be picked up and moved by any incorporeal creature at any time. A manifesting ghost can wield the weapon against corporeal foes. Essentially, a ghost touch weapon counts as either corporeal or incorporeal at any given time, whichever is more benefical to the wielder.