I can't confirm that this happens every time, or that it wasn't something else in combination to this that caused a problem, but I wanted to give out a warning and maybe get some feedback.
I was getting a force close error on battery manager after clicking the large battery indicator. It said blah blah blah.settings caused the error. I decided hey, let me go to the app manager and clear the settings data. settings -> applications -> manage applications -> All tab -> settings -> Clear Data!
After doing this, my home and search buttons stopped functioning at all. No single press, long press or double press actions. Also when I pressed the power button, I only had the option to shut down the phone, no volume or airplane mode. My lockscreen would not show up either. I tried to activate the pattern lock and the pin lock. They would not show up no matter what I tried.
I fought with it and tried to fix it for a while and I could not get anything back to normal so I did a hard reset and besides having to allow market to download stuff, and customizing screens and sounds, everything works as expected now.
I am running the official OTA 2.2 rooted. Has this happened to anyone else? Anyone willing to try in order to confirm?