hey I know this is an old thread but I recently found a "fix" for the home button and it worked for me, it might work for you too. give it a shot before throwing the phone away or buying a new one.
Read the 1st comment on this blog.
http://www.tipb.com/2011/01/04/tipb-bug-home-button-working-iphone/
"1.) Open any application
2.) Press and hold the power button until the slide to shutdown swipe bar appears.
3.) Release Power button
4.) Press and hold Home button Lightly
until screen returns to icon screen
5.) Enjoy your functioning home button!!!
This procedure recalibrates the home button after normal wear or heavy use."
Wow, this is total bullcrap and I can't believe all those people on TIPB fell for this.
Step 4, how exactly do you press and hold the home button "lightly"? You either press and hold it or you don't, there's no "lightly" way. Or at least the phone has no way to register if the press&hold is light or hard.
Next, to prove this is total BS, you don't even have to do anything during step4 and you'll see the phone eventually returns to home screen by itself, after about 20 seconds. That's some serious home button recalibration right there!
Gotta love placebo!
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