Its not really thinking that its a phone. Any phone referances are just residuals from android (which was originally written for phones.)
If its still giving you problems I would suggest reflashing it again to clear everything out.
This
wiki has the instructions for reflashing to whichever firmware you want. I would suggest flashing to 1.1.6 first.
This will totally clean out all the files on the gbox.
Remove all the files and folders from the sdcard.
unzip the
1.1.6-rc zip and put the 3 files from it on the sdcard (no folders)
You need the 3 files from the 1.1.6 zip (mx2update.zip, factory_update_param.aml, and recovery image) on the sd card.
Then do the toothpick method
Toothpick Method Instructions:
1) Unplug the power to the box.
2) Using a toothpick or something similar, insert it into the back of the A/V port until you hear a slight click sound. (This is the hidden button in the A/V port and you should be able to feel the button depress)
3) Holding the button down in the A/V port, you will plug the box back into the power.
**Keep holding the button in until the android robot shows on the tv, Then release it.**
*** For firmware greater than 1.1.6 hold until the recovery menu appears ***
4) You should now be in recovery. Firmware 1.1.6 does everything automatically.
For firmware other than 1.1.6 clear the data, clear the cache, then install the firmware from the recovery menu.
Upgrade higher than 1.1.6
After 1.1.6 install is done,reboots, and is running, do the toothpick again and with the firmware needed for whichever version you want.
You'll want to remove the three files, from 1.1.6, from the sd card.
Put the 2 files (the g-apps also for betas if needed) for the version you want on the sd card. The 1.1.6 is done differently than the others.
** Dont mix and match the install files even if they have the same name **
Do the toothpick again
For firmware other than 1.1.6 clear the data, clear the cache, then install the firmware you want, then the g-apps if needed (betas only).
I've had to do this when my gbox's memory filled up and a normal reflash/reset wouldnt clear it (as per matricom). Then I flashed mine to 1.2.2 beta.
[edit] None of these steps (or firmware) require it to be hooked up to the internet until after its flashed, rebooted, and and you are doing the initial setup.