I was able to add the setting myself by editing a couple files. Obviously, you have to be jailbroken. I used iFile to edit them directly. Here's what I did:
1. Go to /var/stash/Applications.pwn/Preferences.app/English.lproj and open Home Button.strings
2. Add "GO_SETTINGS" = "Settings"; to the list
3. Go to /var/stash/Applications.pwn/Preferences.app and open Home Button.plist
4. Copy the double click code for one of the standard options and paste it where you would like the Settings option to be in the list. The code starts with <string>setDoubleClickAction:specifier:</string> and ends with <key>set</key>
5. Beneath the bundleID AND id keys, change their strings to <string>com.apple.Preferences</string> Don't forget to capitalize Preferences.
6. Change the label string to <string>GO_SETTINGS</string>
That's it. Not sure if you have to reboot. I did and it works great.
EDIT: Now that I think about it, if you are already jailbroken, it would be easier to use SBSettings to manage preferences. Oh well, this is a nice proof of concept anyhow.
Here's what mine looks like...