Are you able to get widgets at all on the screen? The clock resetting every time you turn off the chumby with the power switch is actually "normal" because it's meant to be an always on device (the backup battery is there to just hold you over in case the power goes out). However, if you configure the chumby to get time from network, the clock should update itself from a network time source every time on boot.
The no response on squeezing the chumby is a known problem with this batch; some chumbys develop this problem if they are squeezed too hard as the bend sensor becomes dislodged and stops responding. Hopefully this will be fixed either with a revision to the UI concept and/or a better mounting system for the bend sensor. However, in the meantime there is a hot spot on the upper left hand corner of the screen that you can use to bring up the control panel.
The chumby as it runs will get warm to touch on the screen, and will be hot on the inside if you touch it. It should be unpleasantly hot to touch but not hot enough to burn. The electronics are rated to work up to 70C (158 F), and the temperature that you get to is around 50C (125 F) during normal operation. The experience of touching the chumby core is similar to if you were to take the case off your computer and touch the CPU itself (not the heatsink) while it is running.
Still, the big question is: do you get widgets on your screen? :-O
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