The "installing" thing can come from having done a #7370 and apps previously installed on the memory card trying to re-init themselves. I did a #7370 on my E50 like this, and it was no end of grief -- using the memory card as-is was killing the device. I eventually stuck it in a card reader, saved/wiped and put it back.
Have you tried taking out the memory card to see if it went nuts? When I first powered up this E60 on Saturday it had v1.x firmware; I formatted the MMC but it would not mount properly under Linux, no matter what. I upgraded to the new v2 firmware, reformatted the card and it works fine (it's an old MMC from a 6682).
Just an idea...