Hehe, The bolded part...

Text / Ascii characthers, like the ones inside rcS file you edited are stored in files, when you enter 5 lines into that file, the editor you are using automatically adds special chars at the end of each line that are interperted as end of lines, or new-lines.
Pressing the Enter key actually does that, you press enter, the application adds \n (linux) \r\n (windows)

In the above peace of "code" there are 4 lines, each of the 1st 3 lines end with an invisible new-line char.
Linux uses \n (0xA in hexa) and windows uses \r\n (0xD0xA).
When you copied the file over winscp, and opened it on WINDOWS with some editor, the editor probably change all the \n occurrences to \r\n occurrences. Then you copied it back to the N900,
the n900 is trying to read that file, and says to himself "WTF??? what the hell is this \r\n, this is not for me... i'll reboot."

Why does linux use \n and not \r\n? the same answer for the question : "why does windows use \r\n and not \n?"...

Why does N900 fail to read that? cause it's linux.
Next time, use VI.

For further reading about this... Wikipedia

I'm sure Nokia will be pleased to give you a samsung galaxy s, or tab, right after they give me one