Ok, I think I have it figured out for my phone. Here are my steps to get Backup Assistant installed as a system app where it shows up in the App Drawer and the link in Settings works. Titanium Backup confirms that it is installed as a system app (name shows up as red).
1. Take the 2 files (BackupAssistentClient.apk and BuaContactAdapter.apk) and install them using Root Explorer or Astro. This will install them to the Data/App directory (as seen with Root Explorer).
2. Make the System/App folder read/write by pressing the "Mount R/W" button at the top of Root Explorer.
You can also make the System/App folder read/write with this command in ADB:
mount -o remount,rw -t yaffs2 /dev/mtd/mtdblock4 /system
3. Move the installed Apks from Data/App to System/App with Root Explorer. They may be named com.motorola.android.buacontactadapter.apk and com.motorola.BackupAssistantClient.apk in the Data/App folder. I don't believe that there is any need to rename them, but I am not positive.
4. Make the System/App folder read only by pressing the "Mount RO" button at the top of Root Explorer.
You can also make the System/App folder read only again with this command in ADB:
mount -o ro,remount -t yaffs2 /dev/mtd/mtdblock4 /system
5. Make sure that Backup Assistant shows up in the App Drawer and that the link in Settings works.
I HAVE NOT tested the Factory Reset after doing this.