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Try pulling battery and holding power button for 30 sec. Then re-install battery and power up.
If that doesn't work you may need to do a factory reset. Warning you will lose all apps and data if you factory reset your phone. This will restore your phone to fresh out of the box.
Backup everything you can onto a PC.
When it's finished go back to the market app and sign in to your google account. This will sync your contacts back to your phone. Then go to menu/my apps. All your paid apps will be there.
If that didn't work take it back.
 
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