Hmmm, an update to this thread.
I have recently been using an 8gb class 2 MicroSD card as follows:
http://www.amazon.com/PQI-MicroSDHC-.../dp/B003HIXSPG
Using the SD formatter as I described earlier certainly did reduce drastically the "Crash to home screen" problem, but it hasn't gone away for me.
I spent a few hours reading in one sitting yesterday and it happened twice. Removing and inserting the card again got everything re-detected again, but it's very annoying.
Since then I have gone back to my old 2gb (non-SDHC) card and the problem has completely gone away.
I thought perhaps it might have been my SDHC 8gb card only being class 2 was too slow.
But seeing one of the previous posters here is using a fast class 10 card and still having the problem, I think it's a compatibility issue.
It'd be great if someone from Kobo could post in this thread to make an official statement about this. Alternatively if someone has a link to more information about this, it would be appreciated.
As it turns out I can still use my 8gb card in my phone, but it'd be nice to be able to reliably use it or buy a new one that will work properly with a Kobo.