I just looked up use of PCMCIA cards and card-based software in my eMate manual, and find: a) that the cards are formatted differently in NewtonOS 1 and 2, which is what I had thought; and B) that there is a switch that locks some PCMCIA cards so that they cannot be overwritten. My memory cards do not have any such switch, but you would expect an application card to have it. It is possible, I suppose, that Apple designed the introductory card so as never to be overwritten (i.e., with the switch permanently on LOCK), but more likely, you need to check for a switch. That would be a start.
None of the error messages in the eMate manual that I found corresponds to what you have seen. I suspect, therefore, that the card's format is corrupt. The later Newton OS is not supposed to give that message if a card designed for an earlier model is inserted and is good. Normally, software written for NewtOS 1 can be updated for use on a v. 2 machine like the eMate, and you simply get a message asking you whether you want to update the card for use in the later system — or completely erase the card and thus reformat. The fact that you haven't gotten this message may suggest that the card is dead. If so, and assuming there is a switch, you might as well reformat. However, before taking this step, there is one further possibility: does the card have a battery? Many of them did, and it would, of course, now be long dead. How you deal with replacing one (there is talk of doing so in the manual) I do not know; I have never seen such a card, just as I have never seen a card with a switch.
As for the slot in your H1000, I would have thought that the easiest way to test the slot at this stage would likely be to find a PCMCIA modem card and pop it in. They aren't formatted and they don't have batteries. If an appropriately vintage modem card is inserted, the machine ought to recognize it; my Newtons never met a modem card that they didn't like, though the early systems may be different.
I do have a spare PCMCIA modem card somewhere, I think. My memory cards, by contrast, are not a lot of use, because your 1st generation machine cannot read a card formatted by NewtonOS version 2.
I think my modus operandi would therefore be to see: a) if there is a switch and/or battery; B) if the software meant to be on the card is on UNNA.ORG, in which case it might be possible to restore it to the card; and c) if the machine is running a properly updated system (again, UNNA). It that fails, well, I do have to come up to Toronto sometime....
For more information, I would go to the Newtontalk mailing list archives. There's not a tremendous amount of Newton expertise here, and in general, you want to find out what the real zealots say if the goal is to use one of the first Newtons, since they were not much liked and tend to be overlooked models.