Having a working ping indicates that /bin/busybox is OK. However, this is not true if you still have iputils-ping installed (bb-power won't create symlinks for applications that already are installed). Do you still have that package installed, and if so, did you also try out other commands (launching a new X-terminal instance itself counts as well)?

I assume you can't get into backupmenu? If you have a framebuffer enabled you would see console output after the Nokia logo. There could be useful messages there, although they'll only be there for a very short while if /bin/busybox would segfault or so.