Well, there is at least one (paid) app that already does this (could be more but i don't know of them) - "MultiTasking Pro" http://www.cyrket.com/p/android/com....ultitaskingpro
It would be nice to have extra functionality though, such as a clock (say, if you're in the middle of a game and want to check the time).
As for how it works, just from testing it out, it appears to act as a launcher (given that single home button press takes you to home launcher). I gather this as I had to set it as the default app when i pressed home button for the first time, aswell asthe fact that you have to select the home launcher in the app settings.
The way the app works is, press home button once brings up the menu (overlaying existing app). press it a second time and it takes you to the "default" home launcher as selected in settings. If you hold down home, the original app menu pops up, reinforcing the fact that this isn't a replacement per se.
Of course, overriding the original home button hold function menu would appear to be a much cleaner solution, and I welcome any info on that... whether its integrated into touchwiz or what not... One things for sure, is that samsung modified it to include a link to their "task manager" app.