"Apple Support documented how to perform a reset. However, note that resetting t"he iPhone or iPod is not the same with restoring the iPhone or iPod. Restore will erase and wipe out completely all information and data that contained inside the device, including musics, songs, videos, contacts, photos, calendar information, call lists, maps, applications installed and any other data. All iPhone or iPod Touch settings are restored to their factory condition. Meanwhile, reset is more about hard reset, for those familiar with terms associated with PDA, Palm or Windows Mobile. In other word, reset is simply a forced reboot, where power is cut off from iPhone or iPod Touch to restart the device from fresh.
To reset the iPhone or iPod Touch, press and hold down the Sleep/Wake button and the Home button simultaneously at the same time for at least ten seconds, then the LCD display will clear and the Apple logo appears on the black background. When Apple logo appears, reset is done."