Just supposed to press the Home & Power button for a second together. When you see the screen flash & hear a camera shutter that means you've taken a screenshot.
What it sounds like you are doing is holding down both, which is the way you do a reset on an iOS device.
Click the home button and on/off button simultaneously to take a screenshot. The screen will flash white, and the image will be placed in your camera roll in the photos app. This method works with any ipod, ipad, or iphone. You can do this within any application.