The previous post is a bit wrong, that is why it took them 8 times to get it right!

1: Power Off Phone
2: Hold down record button (for audio notes)
3: Power on Phone
message comes up: "press any key to enter boot loader"
4: Let go of record button
5: Push and hold down the joystick button

At this point, you're looking at a menu with 1->8 on it, select 8 and the phone should hard-reset.

If you end up at a red/green/blue screen, you've got it wrong, and you'll need to whip the battery off and start from scratch!