I recently had my home button stop working. I have barely had my ipod 4th gen over a year and took great lengths to take excellent care of it, Never dropped it etc. I thought I had possibly just wore it out and would need to upgrade..
After some research I found out that it was not broken but merely that a tiny and I mean tiny shim placed between the internal switch and the one we push fell off. This tiny little plastic shim is glued on to the top of the internal switch and after so long falls off leaving the home button un-useable..
Now one could take the ipod in to apple they will sell you another for $100-$150 depending on generation etc..Then take your Ipod send it to their repair center, glue a new shim on to your old ipod, re-package and resell it..
wow talk about making free money..reselling an Ipod possibly 2-3 times at a profit sounds dam sweet.. to them..
I opted to look up how to repair the home button and do it my self.. there's plenty of videos on youtube detailing exactly how to fix it your self and save a hundred bucks or so..
In short you warm up the ipod slightly with a Hair dryer or setting it in the sun for a few minutes just enough to warm the adhesive up under the glass screen. Then gently slide a thin sturdy piece of plastic under the glass around the edges to break the hold of the adhesive and lift the screen out. ( on fourth gen Ipods you need to lift the glass from the bottom by the home button as there is a clip under the top portion that hang's up and will break the screen if you try to lift from the top) once the bottom is free and you can lift it you would need to swing it up toward the top.
Once open you can see the button sitting on the main board directly below the home button we press which is still attached to the screen..I glued a tiny piece of the tip of a plastic tooth pick to the top of the button with gel type super glue.. let it dry, placed the screen back down on top of the ipod and gently pressed the edges of it to reseal it to the ipod.. and boom.. I now have a working home button again....
IMo apple could have easily made the button we press with a nib on the bottom to actuate the internal switch we press that would have possibly outlasted the ipod it's self.. But then reselling an Ipod you paid them to take and fix would seem much more profitable..