Looking at the very first post in this thread, I'm not sure TheVirus' way of factory resetting the kindle works... I have a kindle 3 wifi and the blind factory reset I did on my friend's kindle (sort of blind, I had my own as a guide) was as follows:
Turn it on with the slider
Press home
Press menu
Press the down arrow twice
Press the select square (in the middle of the arrows)
Press menu again
Press the down arrow 3 times
Press the select square
Press the right arrow
Press the select square
I think I restarted it after by holding the power slider...
Amazon are pretty cool about returns but it set my friend's mind at rest
I know this thread is old but I was googling for info on how to do a blind reset (before I remembered I had my own doh!) and there wasn't a lot of info available that I could find.