Home button does not bring me to the home screen

Question

I bought an iPod Touch 16GB in the beginning of june. It was a gift, and has not been in use until yesterday. The home button is totally unresponsive. Pushing the home button will not give any respons at all. Whenever I launch an app, I'm stuck there, until I shut the device off or reset it.
We felt this might be a softwareproblem. The software was upgraded to 3.1.2
The iPod is fully charged. I have done a restart and a reset several times. All of the content on the iPod (music was the only thing put into it, no apps) is removed. I have reset all settings and the software is restored several times using the restore button in iTunes.
I can do a "hard reset" (holding down the sleep/wake button and the home button at the same time for 10 sec will give me the expected respons). So it seems the home button hardware is working.
I still believe this is some sort of software error. I have done everything suggested by Apple to sort out the problem, but nada!
This is a brand new iPod, it has never been used and I obviously will take it to the store and I am sure it will be fixed or replaced.
BUT: Does anyone have any suggestions, in case there are something I should have tried out first?

Answer 1

One more thing before you take it back to the store - try a restore. You will do this from within iTunes. Since you really don't have app data to concern yourself with, do a "restore as new". This will wipe it clean and reinstall the firmware. You can then sync to add everything back to it.