So I was sitting at working talking on gaim, took a break, came back about 20 minutes later, and the keylock button wouldn't work. Played with it for about 10 minutes finishing up my conversation and went to reboot it to see if it would fix it, and noticed the power button also does not work. I was able to reboot it via the terminal with shutdown -r now. I was also able to turn it on(i.e. the power button worked) when it was off and the button stopped working when it was on. This makes me think the device thinks the screen is still 'open' when it is in fact 'closed' ... I remember specifically the key lock slider button not working when the device was open, but never tried the power button. Does the power button work on the n810 while the device is open? Anyone experience this problem? Anyone have any idea how to check the status of opened or closed? I looked around in /proc and found nothing. Not familiar with DBus at all but I hear that's how it does everything else. Anyone have any idea how I might go about fixing this?

In case anyone was curious I narrowed this down to the powerlaunch package. I installed intending to mess around with it without looking into it very much. Apparently it takes over those buttons and there is a problem with it so powerlaunches menu's don't activate. It seems like a very cool project and I hope I get it working, but it's glad to not be freaking out about it anymore =)

Had this EXACT problem and tried every known/unknown solution to resolve it. Thanks for taking the time to document the prob and solution.

So the headline could be narrowed to: 'powerlaunch bug prevents power and lock keys from working' ?

No.
Powerlaunch doesn't have a bug affecting this (AFAIK), but it is very easy to configure powerlaunch to do what you don't want it to do, and rather complex to get it doing what you do want it to do.