I believe you when you say the reset button is a honest-to-goodnesss reset. But it does not clear the system to factory state, correct?

The reset to factory conditions that is in the setup menu which is more analogous to a "format your disk drive and reinstall the OS".

But what if you can't "boot" (for what ever reason) so as to get to the "reformat" (factory reset) command. Does the shorting the battery terminals make it "reset to factory" state or is this just a "colder" reboot (i.e. same as using power off on a PC instead of reset button).

Just curious.