To save everyone who is trying to flash a image with /usr/bin/flasher on their device from banging their head against a wall, can someone who has the SDK or still has PR1.0 on their device upload /sbin/fiasco-flasher somewhere? That way people can use the supplied kernel images to flash directly on their N900s.
Run X Term and become root, then type fiasco-image-update /home/user/MyDocs/zImagexxx.fiasco
Replace the xxx with correct mhz number, e.g. if your flashing the 800mhz you need to type fiasco-image-update /home/user/MyDocs/zImage800.fiasco
Remember X Term is case sensitive.
Once done please reboot.
This worked for me running PR1.1
If you want to return to the stock kernel then open X Terminal and become root, then use the following command apt-get --reinstall install kernel kernel-flasher and reboot.