Default launcher app hangs at boot up. Unable to do anything with phone (NexusOne)
Have you tried booting in safe mode?

Nexus One Safe Mode

1) Turn off your Nexus.

2) Remove the battery if it cannot be done the normal way.

3) Press the power button to start your phone, and right when the logo appears, press and hold the trackball. 

You should also be able to hold down the touch sensitive Menu button at this point, if you prefer that.

4) Keep pressing until you see the lock screen, and you should now be in safe mode.

While in safe mode, see if the problem persists. Uninstall recently installed / updated apps that you feel may be causing a problem and clear app caches / data caches.

To exit Safe Mode, just reboot your device.