Thanks Fanoush! Now booting from SD with new version. Here's how I did it (on my n800; not sure about n810 booting from internal card), in case it helps others:

I booted from flash. Then did SSU update, which worked fine. Then I used fanoush's initfs flasher. (Follow instructions in this order: 4, 5, 9, 10; you do not need to enter "mv bootmenu.conf.n8x0.example bootmenu.conf" at step 5.)

Upon reboot, I had my bootmenu, and there was no option or need to run SSU while booting from SD.

I will now refrain from rotating to portrait mode until emjayes updates sliderotate. I sure hate to get those double panes!

EDIT: Below, the smart kids say I'm confused. Even though control panel while booting from SD shows updated version, it's wrong. Read on, or come back here later after I've figured out how to update SSU while booting from SD....)

UPDATE.