yes factory reset is fine. as far as keeping it from happening it's kinda random so not much prevention you can do. kinda like with windows when operators ask me why windows gives an error and i just reply it's windows. But all joke aside hopefully it won't happen again only happened once with me on my G1 reset fixxed it. now i have an Eris.
Well I did the factory reset and all was working well until I decided to restore my data from the SD card with My Backup--Bad Idea! Eris is now a brick... Will not boot past the htc screen-it just hangs there. I just called htc and they said to take it to VZW for a replacement. - Very frustrating.
Update (12/7/09)- I went to my local VZW store yesterday and the contract technician that I spoke to asked the VZW tech (employee) what to do as far as the replacement device. He suggested trying the hard reset one more time (volume down + green phone + power/red phone). It worked and my Eris cam back to life (granted it was back to factory settings). SO I'm now in the process of reinstalling all my apps, etc. I'm still going to reboot it every once in a while to make sure the OS does not get corrupted again. The VZW reps said they have seen a lot of problems, but did not recall seeing this particular one before.
I also asked about v2.0 or v2.1 and he said he had just read about it this that morning and it will be within the next 2 weeks.