I have the same problem. I set it to 10 seconds and if I try to turn it off before that by tapping the icon again, I get an error message and need to reboot if I want to use it again. My solution is to just let it time out and if I need it for more than 10 seconds I'll just start it again.
The only phone I could test it on is OMNIA2 i8000 and it works fine for me.
Maybe you could write more details about you error so I can try to set it up the same on my phone and see if I get the same problem:
What error message do you get?
Did you change the value of timeout in the registry?
If so, what value did you set it to?