I've seen reports around the Net of people experiencing odd things with the touch screen on the Nexus One. Touching one location and the response for another location. I hadn't seen it myself ....until this morning...and I've worked out what caused it (in my case).

I powered on my phone in bed and I had tucked it under my pillow smother the startup noises. When I tried to use it, everything in the bottom centimeter of the screen brought up the launcher. If the keyboard was being used, the keys in the lower rows would present incorrect characters. Floating menus (like the reboot / power off menu) were completely unresponsive. To restart the phone I needed to open a terminal and type reboot.

On rebooting, everything was fine. So I powered off, tucked it back under the pillow and powered it on again. More strangeness ensued.

So! If you want the
Nexus One to behave itself, don't power it one with anything touching the screen that may mess up the calibration of the touch screen during booting. I imagine stuffing it in a pocket would also not be a good idea while its booting up.