I just had that. I went back into linux - reformatted that panicking partition twice (to make sure) and re sent the nitdroid files to SD partition.
Use gparted to see if it's fine (triangle with ! means error).
Just wait at the bootmenu screen for about 20 seconds to initialise the SD and try it again.

@Siggen:
Great news for the X10 - Rooted today
Awaiting setup guide and details:

http://forum.xda-developers.com/show...51336&page=168

I can help soon