Ok, so this is whats happening: I press both the buttons and keep pressing, in about 2 seconds apple logo appears and in another 2 seconds the screen dims ( I can still see the Apple logo but the screen looks unusual, its dim with square grids on the upper half and a vertical strip in the center) after 4 seconds the screen flickers and is the display is turned off, after 2 seconds the apple logo appears again and if I keep pressing the iphone turns off and doesn't start again. So I have to release the buttons and start this process again....just going in the loop....
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Ok, the phone is back on now. When the apple logo appears for the second time then I release the buttons and logo stays on for about a minute and you get "slide to unlock". phew....
Thanks for you help, is this common that the iphone gets frozen on ipod (or any oter app) and you cannot power it down and if so what do you do then, just the same thing as what I did or is there a better solution? It never happened to me before. and by holding both the power and home buttons did I put it in DFU mode?