Well 1.1 is working fine now. Here is the sequence of events:

AIM 1.1 causing soft resets -> Hotsync anyways
(handheld overwrites desktop setting)

Now everytime I access the internal memory via File Manager, get a fatal error (so cannot remove AIM software)-> soft reset

Use my card reader to go into SD card Backup Buddy folder and remove all AIM.prc associated files -> hard reset then restore from SD card

After restore and soft reset, get fatal error and only hard reset will fix -> hard reset

Hotsync (desktop overwrites handheld setting) and restore -> everything, including AIM 1.1 works fine, go figure