If you are getting “I get a error saying you cant format a mounted partition” Follow the step below:
adb shell
su
mv /system/bin/userinit.sh /system/bin/used
reboot
busybox dd if=/dev/zero of=/data/dataimg bs=1024 count=1048576
busybox mknod /dev/loop0 b 7 0
busybox losetup /dev/loop0 /data/dataimg
busybox mkfs.ext2 /dev/loop0
mkdir /data/data1
mv /system/bin/used /system/bin/userinit.sh
reboot
http://forum.xda-developers.com/showpost.php?p=7752834&postcount=463