I dislike CW (and yes, I've used it), but it's not a CW problem. It could be a ROM Manager flashing problem (it's legendary), and flashing SPRecovery fixes it so ROM Manager can push CW, but with FroYo came the RRS and a new bootloader and we have to turn the RRS off or we see this.
The way to tell is if you have NO recovery it's a flashing issue. If you see stock recovery it's RRS. No recovery is resolved fastest by flashing alternate recovery in RM. Stock recovery requires shutting the RRS down.
Wll as far as i know the problem is fixed so thanks to everyone! Specifically mwhartman, his solution seemed to work perfectly for me.