This is a known issue with FTouchFlo, I have been using the newest version and that has not happened to me yet (has happened to me with older versions), but I just installed it on someone else's phone today and it did that. Not sure what about that application causes this but the only recourse is a hard reset as far as I know. Always do a backup before Installing apps.
You can always read through all 76 pages of the
[2007-10-25] FTouchFlo v.1.4.1 HOTFIX thread. Or you could ask eFrost (wrote program)
The only good thing is that the phone is fully functional, so you can back-up all your data.