Clicking the home button would do nothing, no click feel, no click action.
Be ready to work in a lilliputian world! Would definitely be much simpler if done again. I put it all back together and still no click action. Turns out the electronic sensor had been pushed back into the board a bit. Opened the iPod again, added a thin shim to the back of the button, and all works well now.
Be careful when removing the old glue from the back of the iPod Touch's glass. The "blacking" can be scraped off very easily, even with a thumbnail. Rub, don't scrape, that old glue away!