Thanks Crazydip. I have to say that after all the tries from different resources only your post I have had success with. Have a X10Mini with latest Android version. Below are the steps I did to finally get android market working.
1) Backup data (Using restore or backup app)
2) Download EZ file manager from Slideme (You need a file copier to copy Vending.apk to the Root folder)
3) Download and run Superoneclick (I used v1.6.5) in administrator mode
4) Connect the phone with USB Debugging mode
5) Copy vending.apk to Phone card
6) Use Superoneclick to root Phone
7) Using File manager move Vending.apk to /system/app/ (Here where they will ask for root permission.)
8) Run the vending.apk from /system/app/. Should install without any problems
9) Use Superoneclick again to unroot your phone.
10) Remove cable and uncheck USB debugging mode
11) Turn of phone and turn it on again.
At this point when you check in apps you should see the AM. But I had a problem here where android market starts but then closes with an error. I did a hard reset, which involved using companion suite to repair/update the phone. This unfortunalty deletes everything and you will have restore from the back up in step 1. Waiting for the update to finish and crossing my fingers it worked. Now a happy camper with android market. :-)