1. Plug-in your iPhone to its charger (I’ve not tested it by plugging in directly to a computer).
2. Long press Home button until the Voice Control screen comes up.
3. Unplug the cable immediately from your iPhone.
I’ve tested this on an iPhone 4 but not on other models. It seems to work, well, at least for me. If it doesn’t then most likely the home button circuitry or logic board is defective.
I have an iphone 4 and I've had the same HOME button problem and it only started happening after the second to last update! The button does indeed work, there is no hardware fault and I suspect the majority of people out there experiencing the problem do not have a hardware fault, I say this from a basis of knowledge as an Electronics Engineer with over 25 years of professional experience in a wide range of electronics.
The problem is firmware related and as previously stated I believe it has come about as a result of the most recent updates. The problem may seem to be related to installed software ... I suggest that you think to when some applications would crash on PCs and others were fine .... it's a case of how many apps are running, what resources the apps are using and the demands on the hardware. It is probably impossible to pin down all the applications that cause this fault and certainly I've closed down all the apps and still had the problem, it is very similar to endless loops that some PC software can cause an operating system to get into ... hence the only solution that works is to reboot, which no doubt people have done and found that for a while things were ok.
I have done the same many times and sure enough, for a while the phone works. Indeed, I tried the solution proposed by Mshafeer and it worked, but I bet my bottom dollar that in a few hours/days the problem will reappear ... if not I will repost thanking him profusely and recommending his solution to all ... however I still thank him because it's good as a short-term solution.
So what's to be done ... wel Apple need to sort out the firmware ... I want my cynicism to be proven wrong, but I suspect the iphone 4S doesn't suffer from this problem. My phone is over a year old so I dont know if its still in warranty, for the price I think it should be (Hint, Hint Apple), but if it isn't then I think it is the responsibility of apple to fix this problem immediately!
The iphone is a conundrum, it isn't the best specification phone out there, I have a Galaxy S2 which wipes spots off it, but I like it ... lots of us like it and not just because it used to be cool to have one. The one thing I like is the security, I do my banking on line with it, I wouldn't use my android phone for that in a million years. Also, it's tidy ... android phones are just messy with apps just flopping onto your screen and I don't know it just feels amateurish. I would akin it to the differences between linux and windows, sorry Apple I won't mention the dreaded enemy too many times.
So, get your act together apple, we buy your phones because we like them for their sturdiness, quality, design and functionality (even though you can't seem to get the hang of bluetooth). If you don't then the next phone I consider may be a Nokia Windows phone .... I suspect that many others will think similar thoughts about windows, android or RIM type smart phones .... you have been given a heads up by several forums that your customer's aren't happy ... deal with it quickly please (you've been getting these posts all through 2011!!!)
A concerned and frustrated customer
You are not addressing Apple directly here, this is a user to user forum and whilst Apple may monitor these forums from time to time they have no presence here and do not respond. I would suggest you send your feedback directly to Apple using this link http://www.apple.com/feedback/iphone.html