Hey.
I also have a 5610, and I bought a 8gb MicroSDHC from Sandisk, works like a charm.
There are a few downsizes to it, though. The phone is definately sluggish on startup and when accessing the memory card, and it only reports it as having 3.6gb, but accesses the full 8gb contents (if it doesn't recognize the card at first, just give it 30 minutes, it really takes its time reading those 8gb).
About the formatting problem, I just copied everything (meaning the directory tree) from the 1gb card that comes with the phone, and it accepts it as formatted.
I also had the "operation failed", then "camera in standby mode" problem. Here's how I solved it: set your camera settings to save the pictures to the phone memory, then restart your phone, start the camera and set the settings back to the memory card. Should fix it.
Oh, and mattdanielc, thanks for the tip on the slidebar lights. That thing blinking all night and day was driving me nuts. Much better just blinking when something actually happened.
Last, I'd like to make a formal complaint against the 5610 manual. It plainly SUCKS. The phone has so many functions and gadgets and the manual only covers the very basic functionality (and even that not well). I'm used to the print manual being a quickstart, but the online version should be comprehensive, after all I'm paying for this, and not that cheaply.
Cheers.