Hi! Since I bought my iPhone 4 GSM (was 1 month old when I bought it used) I've had the same problem. The home button has always been recessed, like 1 mm, enough that you feel the sharp edge of the screen. I have compared it to all my friends iPhone's and noone has the same issue, theirs is flush with the screen. The button has always worked, but not as great as other iPhone 4's, it's less responsive and less "clicky". Yesterday I decided to take it apart, ordered a home button assembly with the cable fitted to it. When I finally got there and mounted the button it became even more recessed than my original one. Found out this wasn't a OEM/Original Apple button as the seller stated, so I went back to my original button but with the new cable. Tried with putting some tape on the metal where the button touches, on the silver round piece inside the black circle on the phone, check here (where the arrow starts) ( http://images04.olx.in/ui/11/73/24/...bly-iPhone-4-Repair-Delhi-Greater-Kailash.jpg ) This actually did help, the button became almost flush and was still working. I reassembled it and after using it for a day I can say that it's better but the button became even less distinct, as the tape has some flex in it, it takes a bit more pressure to click it correctly. Now my question is: I can't find any piece that is missing when checking various pictures. Mine looks like the one I posted above. But still it's not even near flush and have never been opened before (everything was untouched on the inside). What can I do? Did the production miss anything? Is there some piece I can stick there to make it more flush. Like a round metal-piece to make it higher? Please help me out. This is driving me nuts as I have my iPad that feels great (can't help comparing them). Thank you!