my ipod touch 2g's home button was being slow-to-unresponsive, saw this suggestion and tried it - it seems to work.
1) open an app like weather or stocks (something that came with ios)
2) hold the power button until "slide to power off" appears
3) let go of the power button
4) push and hold the home button until the "slide..." message disappears. This took awhile on the ipod touch, so be patient