OK so here is what I did ...
Started from MIUI 1.11.18
1. Do a nandroid backup
2. download all the files to the SD card. This includes the ROM, Kernel and super user fix
Links:
Kernel:
http://ice-cream-sandwich-sgs.googlecode.com/files/FuguModICS_GT-I9000_update.zip
ROM:
http://ice-cream-sandwich-sgs.googlecode.com/files/ICS_4.0.1_r1-Beta1-i9000.zip
Super User:
http://ice-cream-sandwich-sgs.googlecode.com/files/Superuser-3.0.6-efgh-signed.zip
3. Boot to recovery and do factory reset, wipe cache and davlik cache
4. Install the Kernel first and reboot now
5. Boot into recovery factory reset and wipe cache and Davlik and Install the ROM then reboot now
6 Boot back to recovery and install the Kernel again with out the wipe
7. If after reboot you do not have root then boot to recovery and flash super user fix
8. reboot and it should be working at least it was for me
It seems to me that you are missing the first flash of the kernel before the ROM. It sets up the file system from what I gather
Note: If needed flash the kernel and rom then kernel again with all the wipes as mentioned above.
I know there are allot of folks having issues getting it to run. Not too sure if it was the way I installed MIUI that might have made the difference.
My battery is charging now so I can calibrate it and see how it goes after that (it drained pretty quick today) lol.
I hope you can get it going cause it truly is awesome
Still not working:
Can not charge with the phone off
Google TTS stops working
Phone will not vibrate for SMS or email when in silent mode
BLN stays on for notifications until the phone is taken out of sleep (can be turned off)
Compass is why off (have not attempted to calibrate yet though)
11 MB left in the system partition (not much but I do not think there will be many changes there)
Video play back is choppy and some will not play
Bucky