I also want to thank the OP for his detailed instructions. I'm in the middle of the "My Flash Disk" copy right now but it's looking promising, especially after the past two hours of head scratching.
I definitely want to confirm one thing: Using a Mac did screw things up for me!
First attempt, I extracted the rar file on my Mac as well as copied the files to the card. I did manage to do the WinCE upgrade however after the reboot, my F700BT would not load into testmode. I tried resetting a few times, however I just kept getting a black screen after the logo. I then tried the older version of testmode. Same thing. I redownloaded a different testmode 2.3 file. Same thing.
Second attempt: I figured I'd retry the WinCE upgrade again in case it screwed up there. This time, when I tried selecting Upgrade SD/Format option, it gave me a "can't find winceimg.cks file" error over and over again.
Third attempt: Okay, reformat the card and recopy the files over on a different laptop (using Mac OS X). Same errors as my second attempt.
Fourth attempt: Unrar'ed the file using Winrar on WinXP. Formatted the SD card again on WinXP and copied the files over. Re-did the WinCE upgrade successfully (just in case). Loaded into testmode successfully. Now I'm just copying the "My Flash Disk" files over with a few minutes left to go.
I just thought I'd document that in case anyone else came across a similar problem with a black screen after the boot logo.
Update: The upgrade completed successfully after I used Windows to extract and copied the files.