There is a simpler and better way, using the 0xFFFF flasher. With that, you just have to write one line and then go through the special switching-on procedure that you use when flashing firmware. (The code varies slightly, depending on which version of 0xFFFF you use and where you install it. It could be ./0xFFFF.static -U 1 in a particular installation.)

The drawback is that 0xFFFF has to run on a different Linux computer (which could be another Nokia 770 already in host mode). Installation also requires a certain amount of Linux knowledge. I was trying to write a procedure that could be used on the 770 without any other computer, and I hoped to make it available to anyone who cared to take the trouble, even with minimal knowledge of command-line procedure.

The hardware requirements are the same with 0xFFFF, and also the use of command-line for mounting USB storage. These are characteristics of the 770. Command-line mounting of storage is not a bad thing. Linux distributions that automount storage have to include vast and complicated coding to prevent the computer from trying to automount devices that look a bit like storage but aren't. Such complications have not been worked out for the MUSB controller in N8x0. That is why N8x0 can not handle cameras etc. in a stable manner.

With host mode by 0xFFFF, you do not have to worry about losing your onscreen keyboard after a crash, because host mode persists after reboot.

@Bun, you have other Nokia tablets. You could run the version of 0xFFFF that qwerty12 has packaged for the IT's. A .tar.gz file for it is at the bottom of this post. You untar it somewhere in the Linux file-system, not in FAT/FAT32. (This is on your other IT, not the 770 whose USB mode you want to change.)

After untarring there will be a folder, and the actual 0xFFFF.static program is inside the folder. You will have to and I would rename it to something shorter, like 0xFFFF without the .static.

To activate host mode, you switch off your 770 and attach it to the other IT. (The other IT must already be in Host mode or in OTG with the Host cable attached.)
cd to the folder containing 0xFFFF (assuming that you have in fact changed the name), and then hold the Home button of the 770 while you turn it on, as you do for flashing firmware.

To switch back to peripheral, you would do the same, except that you use 0 (zero) instead of 1 (one).

Thanks to maacruz for drawing my attention to qwerty12's package.