Classic symptom of (logically ) NO CF card. The card could be missing or not fully seated or corrupt/bad. IMO, the GPS is operating on its base map data which does not include address look up...! To prove that, pull the CF card -- the GPS should act the same as you described.
Try "reading" the CF card (in a Card Reader) on the computer. You should see just a garmin folder, which contains the gmapsupp.img file. If you can read the card in the reader, look into the card slot on the GPS with a small flashlight and see if one or more pins is/are bent out of position. A bent pin usually requires a trip back to Garmin to have that CF card connector replaced. However, if the pins look good, reinsert the card and see if the problem still exists.
I just updated my 2610 from V7 to V8 with the DVD yesterday and spent over an hour on the phone with tech support to no avail.
The woman finally gave me a URL and code so she could control my corn-puter from her station in Kansas.
I had V7 routes and maps in the GPS, but after the update I was getting an error message on the GPS that said the route was no good.
It seems that when you update you need to re-load your maps and recalculate your routes.
My old routes had me going through woods and across lakes after the update.
Too bad there wasnt some sort of direction sheet with the update DVD telling me this.
The support tech was great to deal with. I cant say enough about how patient she was and how she was determined to figure out the problem.
Being a frugal Yankee I will probably stay with V8 because that was free.