I used the command tar -x file.tar.gz and, for one reason or anything it failed. Then I get stuck being able to type anything in, but not being able to run any more commands. Pressing enter just gives me a new line. I don't know how to break out of it either (escape etc doesn't work). The only way I can get back working is to close putty and reconnect.
Is there a way to get it back to normal so I can keep going because it's irritating closing it all the time.
Try hitting CTRL+C :) This will cancel/kill/stop the running command!
But the best way to untar is to use -v to verbose the output :
tar -zxvf yourfile.tar.gz
With that, you'll perhaps see that your file just take more time than you thought unarchiving ;)
If you want to quit it, press CTRL+c. If you want to keep it but being able to write more commands while it's working, press CTRL+z and bg. Then it will work in the background.
Ctrl-C can be used to send a break to the executable that's hanging, but it's up to the application to handle it. Ctrl-Z will break you out of the running executable, but you'll need to then manually kill the process.
What you're doing wrong is you're not gunzipping the archive.
Try this
tar -zxf file.tar.gz
Your command failed because it is trying to read stdin. This is because you never told it the name of the tar file with an "f" option.
A good Idea would be to use GNU screen. That way, when a command hangs, you can open another screen and take a look at the system (e.g. top to see if tar is still working) or you could kill the process by pressing (strg+a) + k to hard-kill the running process within the screen-session. Screen also has the nice feature that your processes keep running even though your SSH-connection died. It's a lifesaver!
Your tar invocation is waiting for input on the command line as the others pointed out. You may also use Ctrl-D to indicate EOF to the tar process.