Hi,
Yes, the same thing happen to me.
I ended up deciding to reinstall the stock Xperia X8 phone firmware Eclair 2.1
Oh... I repartitioned my SD Card, wiped and use the X8 to reformat my SD Card as well (...back to stock)
[it's one of those... better be safe than sorry decisions

]
Method:
<connect> via USB - Xperia X8 to PC - PC Companion should start up
<click> <Support> -> <Repair> - Make sure your phone has more than 50% batt life
Follow instructions on the screen to reinstall your phone's firmware
When it is completed you will see <success> then reboot your Xperia X8
Check your phone <Settings> <About phone>
It should be:
Firmware version: 2.1-update1
Build number: 2.1.1.A.0.6
APP2SD.apk is not naturally supported on the Xperia X8 firmware 2.1
APP2SD is more like a "HACK" for advanced X8 users proficient in programming.
If you are new to Android you should try Link2SD the result is similar to APP2SD (i.e. to move and run Apps from the phone's SD Card).
You can follow the instructions from my post to setup and use Link2SD (do read it a few times before attempting it

)
Root, Install and Use Link2SD
Also... to avoid having to reinstall the X8 stock firmware and starting all over again. You might want to install xRecovery on your phone so you can flash a backup of your phone's OS (including all your installed apps) when things go horribly wrong installing an "experimental" app
You can follow the instructions from my post -
[OLD SKOOL] Root, Install & Use xRecovery on Xperia X8
[NEW SKOOL] Install & Use xRecovery on Xperia X8
cheers
Did you manage to install xRecovery & Link2SD?
