Ok guys, I went to another retailer two days back, tested on their X3 which is updated to 2.1 and I still got that error message about my 64GB card.
In other words, the FW does not matter; it's how the card is formatted. Yes, I know most of you know this by now and told me so (thanks again!), but I am saying this for new owners(to-be) of the X3 to just format their cards first using the X3 itself before reporting the issue.
i.e. Treat this post as an update/case study of that 64GB card "issue"