The textile_filter settings needs to change from single- to double-quotes

The original code in the textile_filter hook uses single-quotes as the form array index, but the key has a variable in it, so the variable is not expanded. Simply changing the single- to double-quotes fixes this.

Instead of

      $form['textile_settings']['textile_tags_$format'] = array(
        '#type' => 'checkbox',
        '#title' => t('Use tags'),
        '#default_value' => variable_get("textile_tags_$format", 0),
        '#description' => t('If enabled, only text between [textile] and optional [/textile] tags will be processed.  Otherwise, all text will be processed as Textile markup.')
      );

it has to be this
$form['textile_settings']['textile_tags_'.$format] = array(
or this
$form['textile_settings']["textile_tags_$format"] = array(