Object reference not found error when deploying WSP in SharePoint 2010

This is not a new error. You also got this error in MOSS 2007 if you did not have permissions on the SharePoint databases. Because many users are migrating to 2010 they think the older WSP is not compatible with 2010 or the stsadm is malfunctioning. No, everything is fine. Just give permissions to the user (on the content db) deploying the WSP and the error will go away.