Ok, you're basically going to do the following steps:
1. Download xtrSENSE5.0.1.zip and copy the zip file to your SD card, just as you did for KaosGingerbread and CS's CM7. xtrSENSE is here:
http://zach.xtr.i6ix.com/xtrSENSE5.0.1.zip
2. Power off the phone.
3. Restart in Recovery by holding down VolUp while you power up the phone.
4. When Recovery starts, go to the Backup/Restore menu
5. Choose "Nand backup" and, when prompted, press the trackball to confirm. This will take a few minutes. Note the time it was when you ran this backup.
6. When the backup is complete and the menu returns, press VolDn to go back to the main menu.
7. Go to the Wipe menu
8. Go to "Wipe data/factory reset"
9. Then do "Wipe Dalvik cache"
10. Press VolDn to go back to the main menu.
11. Choose "Flash zip from SD card"
12. Choose xtrSENSE5.0.1.zip and, when prompted, press the trackball again to confirm.
13. When the flash is complete, it will return to the main menu. Choose Reboot system now.
This will restart the phone; it will take a few minutes to start completely. You will be prompted to go through the setup steps again. When the phone's launcher is visible, try going into the Messages app and sending a text message. See if it works. (At this point there is no reason to install any third party apps - just see if you can text.)
If it does not, try dialing *228 and choosing option 1 to reactivate the phone.
If that still doesn't fix the phone, you may need to call Verizon customer support to see if they can work through your problem. Sometimes it's a configuration problem on their end (though rarely.)
Once you get texting working with xtrSENSE, we're going to restore CondemnedSoul's CM7 using a similar process.
1. Power down the phone.
2. Restart in Recovery
3. Backup/Restore menu
4. Nand backup
5. When this is complete, Nand Restore
This will list all of the Nandroid backups that you have done (which should be two at this point.) They should have a filename that looks like:
BCS-20110815-2045
The first set of numbers are the date that you ran the Nandroid (yyyymmdd) and the second set are the time that the backup was run, in GMT or UTC time. (So, four hours ahead of EDT, or seven hours ahead of PDT.) The time code is hhmm in UTC. (So, the example above, 2045, is 8:45 pm UTC, which is 4:45 PM EDT, etc.)
So, remember when I asked you above to note the time that it was when you ran the first backup? Figure out which of the Nandroid backups was that one (it should also be the oldest one) and choose that from the list after you select "Nand restore" from the menu.
When this is done, press VolDn to go back to the main menu and choose "Reboot system now".
This will restart the phone (again, this will take a little longer than usual) with CM7 back as you left it before. When everything starts up, see if messaging now works.