Fox T-Bird/Cougar Forums  

Sounds like the Set/Accelerate switch is stuck.

I'd tend to think if the button doesn't appear stuck down (does it?), it probably isn't, just because I've studied the construction of the actual button mechanism.  Unless the plastic cover is physically pushing it down, it would pop up and lose contact.  You could always borrow a puller from autozone and pull the wheel (5 min) and remove the buttons to test the continuity...

I had a similar problem a couple years ago only mine wouldn't turn off with the pedal OR the button.  Even after killing the ignition (once the car reached 120+ overpowering my brakes) it still held and revved the engine to max.  That was a bit dangerous.  LOL  My problem was the cable sleeve seperate from the servo housing and the cable just got stuck.  But checking all the mechanical connections couldn't hurt, I guess

If the set/accelerate was stuck I think it would start to accelerate as soon as you turned cruise on. You wouldn't have to push the set/accel button. Sounds like a VSS problem.
Does the speedometer work ok?

Vehicle Speed Sensor.  If it's a C5, it'll be on the driver's side close to the tail shaft of the tranny. 
 
The wiring comes through the 'hump' below the console, and there's a connector right behind the ash-tray/radio/junk collector box.  It goes up to the speedo, then splits off and heads for the ECM and cruise control.  The VSS in these old 'Birds is strictly a magnetic one, and has no excitation like newer VSS pickups.  The conditioning of the signal is done at the other end(s).  If your speedo is working, chances are it's a broken wire (between the speedo and CC), corroded connector at the Cruise Control amplifier, or possibly a dead input on the amplifier.