Hi someone out there,
So I got the original image load up to my load successfully. I still have a bad block in NAND Flash but it seems not to mind it.
All I have to do was to change the target name in their batch file from AT91SAM9M10-EK to AT91SAM9M10-G45-EK. Suppose the log file did indicate this.
Now my main problem was the target not detected by the VS2005.
This seems to be fixed after I installed QFE and made sure that Platform builder was properly linked with VS2005. To check that, just go Tools -> Platform Builder -> CE Check Update and if Platform builder comes up you are ok but if it doesn't you have to change registries. I just downloaded a zip file from here (http://compulab.co.il/workspace/mediawiki/index.php5/WinCE:_Platform_Builder_Installation
Restarted VS2005 and clean built it, then after a while it started to detect the target.
So ya, if anyone faces some problems like mine, hope this helps.