While there hasn't been any update on this weblog for quite some time, I've been buried under a lot of work.
One of the most interesting projects is an embedded ARM-based SoC project with special network acceleration hardware. Unfortunately I'm not allowed to talk too much about it at this point, but be assured it is very exciting, and of course runs Linux :)
During development I found it quite comfortable to run the small embedded system with nfsroot mounted from some larger box. The nfsroot contains a debootstrap'ed installation of Debian sarge for ARM.
The main problem for this kind of operation is the limited on-board memory. But I'm tempted to put a 64MB graphics card into one of the PCI slots and hack the Linux kernel to treat this framebuffer as (somewhat slow) RAM :)