Overheating and constant rebooting

HTC Desire Firmware 2.1-update1
Software No 1.20.207.3
Not rooted
on O2 network

I have had my Desire for 2 months now and am getting increasingly frustrated with software bugs, but put up with them because I love the phone. However, very recently I had problems with the phone rebooting when I used Navigator with Google Maps. I reported this to HTC who told me to do a Factory Reset. However, this did nothing and now the situation is much worse.

I have just got back from a weekend away where my phone was constantly rebooting everytime I attempted to connect to the internet through Apps like maps, news feeds, internet browser, e-mail etc all through a 3G connection rather than wi-fi. Up to now most of my internet activity has been through wi-fi at home, so this was the first time I have been totally dependent on 3G for access. I have noticed that my phone, which has always been very hot particulalry when charging, was uncomfortably hot. At one point just before it rebooted (was watching tv on internet, while phone was on charge) I noticed my battery widget reporting a temp of 39.9C, but since then it has constantly rebooted when it goes above about 37C.

Sometimes when it reboots it gets stuck on the welcome to o2 screen. I then have to remove the back and take the battery out, when I do this i notice that the bottom of the phone, behind the SIM and memory card (above the trackball) is extremely hot, much hotter than the battery itself! I assume it is the processor that is overheating and the phone is shutting down to protect itself. There clearly is a design fault with this phone or a hardware issue, having now searched on the internet I can see lots  and lots of the same reports from other unhappy customers. HTCs response is always the same "do a factory reset" but this does not resolve the issue, never mnd the inconvenience of loosing all your customised settings and apps. 

I hope that HTC come up with a solution. I see that some people have had their motherboards replaced without resolving the problem. I think it is purely an overheating issue, due to poor ventilation and heat dissapation. I have contacted HTC again for a more adequate response. I will also contact O2, as although I love this phone I am not prepared to waste £285 of my hard earned money on a phone that is not fit for purpose.   

Anyone one out there managed to get a solution to this problem???

Thanks for the suggestions. I have replaced the stock 4GB card with a Class 6 16GB card, but that was 6 weeks ago. The last thing I put on the phone before all these crashes was a new live wallpaper that I bought off the Market, called Aquarium Donation. I have now removed that and gone back to an ordinary wallpaper pic. But regardless of all of this these phones are supposed to be able to take 16GB cards and show live wallpapers, even if the latter does drain the battery fast!

HTC have come come back to me again and are now suggesting that it may be a faulty battery so I should try swap that. My battery did last about 24 hrs when I first got it 12 months ago, now I have to recharge twice a day, sometimes more, depending on how much I use it. In terms of battery use, the phone reports that the Android system is using up 55% of the battery power, idle next at around 30%, when wi-fi is off. Last night I turned off wi-fi and mobile network before bed, 8 hours later, the battery temp was down to 22C and battery level dropped 20%. I then turned on 3G and did a bit of checking e-mails etc and before I knew it temp was back up at 37C and the phone rebooted. This is very frustrating. Think I am going to call in at an O2 shop for a chat.

Thank you for your help with this. I really appreciate it! Your advice sounds a sensible way to proceed with this. I will do a factory reset, just backing up all my SMS messages to gmail and my apps to the SD card first.

Just for info I recharged my phone this morning and was recharged to 100% 4hr 9m ago and currently my battery is at 34%!!! I have been using the phone, on the internet and doing some backups and a phone call or two, but thats it.

Phone Battery Use is showing:
Android System 53%
Cell Standby 18%
Display 14%
Phone Idle 8%
Wi-Fi 7%

So very different from yours!

As far as Apps are concerned  I have the following installed
Dropbox
Google Sky Map
Documents to Go 2.0
SplashID
ASTRO File Manager
Barcode Scanner
IMDb Movies&TV
ColorNote Notepad
Brightness Profiles
Airplane Toggle Widget
Bluetooth Toggle Widget
Silent Toggle Widget
WiFi Toggle Widget
Solitaire
Robo Defense FREE
Backgrounds
Toggle Screen Timeout
Voice Search
3G Watchdog
Google Maps
CalWidget
Bookmarks to SD
MixZing Media Player
UK TV Droid
WeatherBug
Dolphin Browser HD
Movies (Flixster)
aCurrency (+ widget)
JustPictures
Battery Left Widget
GPS Test
eBuddy Messenger
Beautiful Widgets
myPlayer
FolderOrganizer
Aquarium Donation
MyBackup Pro
SMS Backup

Didn't realise I had so many! Will take some time to reinstall them and monitor system, but guess I am going to have to do it. If any stand out as being a problem I would appreciate someone letting me know. I do not use a program such as AppKiller as others say it does more harm than good.

Thanks for help.

When i click on the Android system none of the apps in my list are listed as being used! Anyway will go ahead with factory reset, I just hope that everything reinstalls ok. Fingers crossed! I really hope that this solves the problem.

Thanks Madubus! I just wish there was an obvious fix. I know some people have had their mainboards replaced and claim that it solved the problems but it took two months for my rebooting problems to arise, would be great to hear from anyone that has had their phone "fixed" to see if it works OK in the longer term and apps that had previously caused the crashes now worked without fault.

Thanks XSaenen. I will reload my SMS messages and get all the accounts reopened but not reinstall any third party apps for a few days after that and see how it behaves. I will report back the phone readings, temp, battery use etc.

Those figures look more normal to me, although it depletes WAY too fast. 

Go ahead with the reset.  If it doesn't help, you'll need to turn the entire phone in anyway.  Stating that you've done a factory reset should be enough to convince HTC to not just flash the phone and send it back with the same mainboard and battery.  So regardless of the outcome, a factory reset will help. 

@DaveMatt: Your battery is definitely causing some grief. Get HTC to give you a new one.

And to the rest of you whom have problems with the rebooting: root.

http://www.htcdesireforum.com/htc-desire-how-to/(guide)-rootin-flashing-rom/