Default Home button wakes the phone, but does not work otherwise.

Hey all. So lately i've been having problems with the Sony Xperia x10i, and I decided to do a factory reset which seemed to clear all my problems but now the home button does not work at all, except when I use it to wake the device (when the display is turned off and I press it, it turns on the screen and shows me the homescreen).

Is there any way to resolve this?