2. Using root file system on internal HDD doesn't work. Reason is that the init script (linuxrc.sh) only probes for USB drives. This can easily be fixed by adding modules ide-mod, ide-probe-mod and ide-disk to the list of inserted modules.
3. The ftp server drove me crazy as I did not manage to login from my Linux box using ftp or lftp. It just kills the connection saying "422 Too busy to play with you.". After some debugging fun I figured out that stupid-ftpd does not support the AUTH command and simply closes connection when FTP client is probing for supported authentication methods. I've made a simply patch for that, if anyone is interested.