Hum... ok, let's take this step by step...
First, just so it's clear to me, where you ever able to upload any code from http://code.quirkbot.com, and after a few uploads it stopped working correctly? Or has the Quirkbot been acting up from the first time you've used it? And I forgot to ask, what version of Windows are you using?
Now let me give you a bit more of insight of how things work...
The orange light indicates that the Quirkbot is charging, so it turns on every time the USB is plugged in, and off as soon as the USB cable is disconnected (or if the Quirkbot is fully charged). It will turn on, regardless if the Quirkbot is on or off as it runs as an independent circuit.
The way the Quirkbot get's detected by the computer is by sending a fingerprint over serial repeatedly, so if by some reason the Quirkbot is not sending that, or the computer can't read the serial port, it won't be detected. So you shouldn't really need to do a reset unless:
- There was a connection problem during an upload, which led to a "half" uploaded firmware that in consequence will not execute correctly and won't produce the serial fingerprint.
- You've uploaded a "bad code" (as I described before, there is a known bug un the compilation server, that is sometimes producing binaries that either crash the Quirkbot, or makes it go into a "restart loop").
- You've manully uploaded Arduino code that does not use the Quirkbot library, so there is nothing that tells it to report the serial fingerprint.
- You just wan't a quick way to return to the original program.
The reset process works like this: when you connect the reset pin to the right eye, the Quirkbot goes into bootloader mode (for a maximum of 18 seconds), and if it is connected to a computer (with drivers & Chrome extension installed, and http://code.quirkbot.com/program open) Chrome will detected (if there is no USB connection problem) that the Quirkbot is on bootaloder mode and upload the factory firmware. If the reset doesn't finish with the Quirkbot blinking both the eyes and the mouth pulsating (left eye and mouth in sync, right eye and mouth in sync) then it didn't work correctly.
So, by what you've described on your last update, you managed to get the reset to work - maybe you were really experiencing some physical USB connections before? But if it seems to be "working" now, could you try to upload this http://code.quirkbot.com/program/#!/56731d926dd0540100648574 and even some of your own making to see if it "keeps working"?
And then I am curious about the battery... does the Quirkbot still dies when you unplug it from USB or the moment you connect the Servo? (as for the broken Servo Backpack, that is mistake from our side, and we can probably arrange to re-ship new parts to you - I just want to get the bottom of the other issues first)
Regarding the Continuos Servo, I don't have one at hand right now, so I am not sure if that part should feel loose or not inside the case, but I am adding my colleague @Kristofer to the thread as he will be able to answer you correctly.
Edit: Just made the photo upload limit for new users 5 images, it was 1 by default, sorry about that!