If this is an M52233DEMO board (with the Ethernet), then the USB connector is used only by the BDM, for debugging the main processor. Nothing you do to the main processor (which is what the reset switch affects) should have affected the BDM.
(I assume you are getting the error before even attempting to connect to the device with CodeWarrior?)
Are your power jumpers set correctly, and do you have good power? I do not believe it is possible to reliably power that board solely off USB, so the POWER_SEL jumper needs to be set to VDD and you need external power at the PWR barrel connector.
Are the green and yellow/orange LEDs on either side of the USB connector both lit when you plug in the USB?
-- Rich