I had the same problem. I found a forum where they suggested putting one drop of rubbing alcohol on the home button, and then press it a few times. I only let a small amount of the drop to go behind the home key, and then wiped the rest off with a cloth. It works great now, and the home key was completely unusable before I did this. I would do this as a last ditch effort though, as there is water in rubbing alcohol and could potentially ruin the ipod if too much gets in there.