How I did it...
Installing Boot Menu go to http://fanoush.wz.cz/maemo with the browser and download: initfs_flasher.tgz .... If all is well you will get the "bootmenu" on restart - choose to boot from Flash
$ sudo gainroot # chroot /mnt/initfs cal-tool --set-root-device ask
NOTE - I keep getting errors from the OS saying that the Memory Card is corrupted or unformatted - just ignore them!