Thanks go to Bastersero for this.
Steps To Install Swype Beta For SmokedGlass ROM Users and it seems to work for the ERROR message as well:
1. You will need Root Explorer and Astro
2. Go to the phone menu and go to Applications
3. Next, go to Manage applications and click the menu button on the phone
4. Choose Filter and then choose All
5. Uninstall everything in there that has Swype (even the beta installer for those that installed it already and didn't work)
6. After uninstalling Swype, open Astro
7. Click on Search for Astro and type the word "Swype" (without the parenthesis) in the search box
8. Next, click on the Show Advanced Options below the box
9. Click on the drop-down arrow to change which directory in which it will search
10. Choose "/" instead of the current "/sdcard/"
11. Put a check mark on the boxes "Include directory names" and "Search sub directories"
12. Now click on the magnifying glass icon to search
13. After a couple of seconds it will list all the directories where it has Swype files (remember all of those since you would want to delete all of those files)
14. Now, open Root Explorer (I suggest Root Explorer because you can mount and unmount from there) and go to each directory that lists all the Swype files that you need to delete (the ones you found from Astro)
15. After you have deleted everything, reboot your Droid
16. Once rebooted, open your browser and go to your e-mail that you used to sign up for the beta (I just used the stock browser)
17. Click on the link to download the Swype-Installer.apk and install it
18. After it says it's done installing, on the bottom choose Open
19. After opening it, it will prompt you to enter the e-mail and password you chose when you signed up for the beta, so sign in
20. After signing in, it should automatically download the Swype.apk file and install it also
21. After installing that, Enable it so you can use Swype, but reboot first just to make sure no other problems occur after it's done installing
This is something I copied from the swype forum:
"Configured with another Device" Error
A post from a senior engineer at swype:
Hi, I'm the Senor QA Engineer at Swype. Our records show that there was some technical difficulty for some users when installing Swype. We have since uploaded a new version of the installer and the Swype keyboard. Please delete both from your phone and try installing again from the site. If you continue to have problems, please let us know and we will attempt to correct any problems during our regular business hours on Monday.