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No, it's not a bug that it turns on at midnight. It's a feature! It apparently checks for the day's appointments, alarms, etc. After that quick check it's supposed to go back to sleep, but if you have something that makes it think it's doing something, it won't do that. Media Player is one culprit that holds it open, I understand some of the battery checkers also hold it open. This "feature" was first noted when the PocketPC version first came out, and it affects all PocketPCs not just Axims.
Also, you mentioned a case. Make sure the case isn't pressing on any buttons or the screen and turning the unit on that way. I know most of these you've probably tried, but it's happened before! :D
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