I have used ActiveSync 4.0 with the X50, and haven't had serious problems. But I may not be doing the same things you are. The one complaint I've heard is that it stopped syncing over wifi. Are there others that you've heard?

The installation of .NET 2.0 fails when ActiveSync<4.0, and gives a message which implies your device is not compatible.

I have not heard back from another person who was trying to work around this. It does appear to work if you copy over cab files and then run them.

A folder like "C:\Program Files\CritterMap Software\BackCountry Navigator 2.something" will have the cab files.

The cab files you'll need are NetCFv2.ppc.armv4.cab, system_SR_ENU.cab and backcountrynavigator2.cab.

To narrow down the problem, I'd suggest going to

http://www.microsoft.com/downloads/details.aspx?familyid=0c1b0a88-59e2-4eba-a70e-4cd851c5fcc4&displaylang=en

And attempting an install correctly.

You can also try to copy over the cabs and run them on your device. 

Let me know how it goes. It is not often that this will fail with ActiveSync 4x and WM5, so I'd like to know if the problem persists.