I just experienced this same problem this morning. After a few hours of messing around, I think I have found a temporary solution/workaround.
This is not perfect, but it may help you get a backup, or it may help you find the problem.
When you press the home button the error pops up. When the error pops up do not press force close, instead press and hold on your search button (magnifying glass). This should open up voice search, or at least a menu where you can select voice search. From there, say "market" and it will bring you to an internet search for market where "Home - Android Market" is at the top of the list. Click that link and it should bring you to the android market, or pop up a menu where you can select the android Market app. From here, search for a new launcher by typing in "launcher". I searched for "ADW.Launcher" and installed it. After it installs, when you press the home button, it should pop up with a menu "Complete action using..." and a list of launchers, but first select the checkbox at the bottom "Use by default for this action" and then select ADW.Launcher (or your new launcher you just downloaded). Now you can access your phone normally. I know this doesn't fix the default twLauncher, but at least the phone's working.
I joined this forum just to spread the word that this is a temporary workaround for this problem, because after searching google for an hour, I couldn't find anything that was helpful besides a hard reset. And that may be the only true fix. But I think with this solution, we can at least backup our phones before the hard reset... possibly even replace the twLauncher files somehow. I think they may be corrupt.
