Looks like I'm going first! So far, so good. Currently creating the image on mmc2. I'll keep you all posted!

Woah - went dark somewhere...

First time through, the machine crashed? I'm not sure. All of a sudden, I noticed it was OFF! Here's where I got to:

STARTING CREATION OF XFCE.img on /media/mmc2/
THIS MAY TAKE ABOUT 10-15 MINUTES
1048576+0 records in
1048576+0 records out
LOOKS LIKE IT WAS SUCCESSFUL
/media/mmc2/XFCE.img
-rw-r--r-- 1 root root 512.0M Sep 13 21:49 /media/mmc2/XFCE.img
mkfs.ext2 exists e2fsprogs is already installed, skipping install
FORMATTING EXT2 IMAGE
NOTICE: /media/mmc2/XFCE.img is not a block special device.
NOTICE: Proceed anyway? y,n
NOTICE: TYPE y AND PRESS ENTER, its OK I swear
mke2fs 1.37 (21-Mar-2005)
/media/mmc2/XFCE.img is not a block special device.
Proceed anyway? (y,n) y
Filesystem label=
OS type: Linux
Block size=1024 (log=0)
Fragment size=1024 (log=0)
131072 inodes, 524288 blocks
26214 blocks (5.00%) reserved for the super user
First data block=1
64 block groups
8192 blocks per group, 8192 fragments per group
2048 inodes per group
Superblock backups stored on blocks:
8193, 24577, 40961, 57345, 73729, 204801, 221185, 401409

Writing inode tables: done
Writing superblocks and filesystem accounting information: done

This filesystem will be automatically checked every 28 mounts or
180 days, whichever comes first. Use tune2fs -c or -i to override.
EXT2 PARTITION CREATED SUCCESSFULLY

READY TO MOUNT
LOADING MODULES
insmod: cannot insert '/mnt/initfs/lib/modules/2.6.18-omap1/mbcache.ko': File exists (-1): File exists
insmod: cannot insert '/mnt/initfs/lib/modules/2.6.18-omap1/ext2.ko': File exists (-1): File exists
RUNNING FSCK JUST TO VERIFY ITS GOOD

fsck 1.37 (21-Mar-2005)
e2fsck 1.37 (21-Mar-2005)
/media/mmc2/XFCE.img: clean, 11/131072 files, 16553/524288 blocks

Mount seems good!!!

/dev/loop0 495.8M 13.0k 470.2M 0% /usr/local

LOOKING FOR FILE LOCALLY
FOUND LOCAL FILE ./XFCE-6-INSTALL.tar.bz2
STARTING XFCE INSTALL
./
./usr/
./usr/local/
./usr/local/bin/
./usr/local/bin/xfce-setting-show
./usr/local/bin/xfce-mcs-manager
./usr/local/bin/exo-csource
./usr/local/bin/exo-desktop-item-edit
./usr/local/bin/exo-preferred-applications
./usr/local/bin/exo-mount
./usr/local/bin/exo-eject
./usr/local/bin/exo-unmount
./usr/local/bin/exo-open
./usr/local/bin/xfwm4
./usr/local/bin/vte
./usr/local/bin/Thunar
./usr/local/bin/thunar
./usr/local/bin/Terminal
./usr/local/bin/terminal
./usr/local/bin/xfrun4
./usr/local/bin/xfterm4
./usr/local/bin/xflock4
./usr/local/bin/xfmountdev4
./usr/local/bin/xfbrowser4
./usr/local/bin/startxfce4
./usr/local/bin/xfhelp4
./usr/local/bin/xfce4-about
./usr/local/bin/iceauth
./usr/local/bin/xfce4-panel
./usr/local/bin/xftaskbar4
./usr/local/bin/xfce4-iconbox
./usr/local/bin/xfce4-popup-windowlist
./usr/local/bin/xfce4-session

That was it... I noticed the machine was dead.

Now I've restarted...

Died again. Got as far as copying over gaim this time...

I'll continue to try