You'd think that a fast card would be fast for this, but fast cards are optimized for writing large pictures and videos sequentially to the card. Android needs to be able to read small files randomly placed on the sdcard to work efficiently... completely the opposite optimization. What we usually see is lagginess when using this type of card, not complete failure like you seem to be having.
I see no good solution for you except:
- Install CM7 on your NC, replacing the stock rom OR
- Purchase the recommended Sandisk class 2 (should be able to find locally) or the class 4, probably only found online, AND plan on it failing in a year or two.