I have the same problem with my iPhone 3G jailbroken to 2.0.1. This is very frustrating as I do not find the default dictionaries as good as the add-ons.
In Cydia, if you go to install a new dictionary, the author acknowledges the issue in the FAQs, saying ...
Q1: Why does the free version of WeDict often become unusable after a reboot, when one of your add-on packages for it are installed?
A1: This is a known problem, believed to be related to application signing. I don't have a solution to it yet, but it's being looked into and will be fixed as soon as it's (hopefully) possible to do so.
Q2: If WeDict does become unusable, what do I do?
A2: First, reinstall WeDict. Second, open Cydia, go to the "Manage" page, select "Packages" and then, for each dictionary you had installed, find it in the list, press its "Modify" button and select "Reinstall". Until I resolve the issue in Q1/A1, I suggest only installing just the minimal number of dictionaries that you need, in order to reduce the pain of having to reinstall them over and over.
So I guess we're just going to have to be patient until this issue is resolved.
I tried removing the application signing by using ldid -S WeDict, and it worked until a reboot. After the reboot the app would open and then close after a bit. From the shell the app would report "Bus error".