I've just looked at the log after selecting the 'toggle enable internal storage' option and it gave the error that the file/folder doesn't exist. I checked the internal storage and there was no clockworkmod folder so I created one manually, tried another backup and it seemed to work fine. After creating the folder manually the toggle function also works. Seems the problem is the folder not being created.
I don't mean to criticise the great work you are doing but wouldn't it be better to store the .backup_internal file etc in the /sdcard/clockworkmod folder with the .default_backup_format file?
I also checked the delete from external sd function and strangely it works fine here.
Edit: Just doing a bit of testing with this and thought I'd test a full restore. So I format /system, /cache, /data and /emmc before restoring the backup (as a way to make sure everything works)... and thats when I realise that I just wiped the preferences from the /emmc partition and can't enable 'restore internal storage' because the clockworkmod folder doesn't exist. I had to do a restore without internal storage and then boot up, create the /emmc/clockworkmod folder and then go back to recovery and then restore the /emmc partition. On the plus side, the restore worked fine.
Edited by Cyda, 16 January 2013 - 10:31 AM.