Twice I've had my Cybook display a checkerboard pattern on boot. It displays the first splash screen, and right before it displays the seconds splash (when it shows the library), it goes into a checkerboard pattern and is fairly unresponsive.

I'm not exactly sure how I got out of it, I think I pressed the RESET button and THEN pressed the power button (not simultaneously), at which point it went to the library.

At first I thought I pressed a button combo to put it into some sort of diag mode, but the second time it happened, I am fairly sure I just pressed the power-on button.

It's a bit late to answer, but I've had the same problem. See here:

http://www.mobileread.com/forums/showpost.php?p=141631&postcount=13