minimal linux using cd-linux

Hello,

We want to create a Debian based Linux distribution for the
following target hardware:

      550 MHz Intel Celeron
      512 MB RAM
      256 MB ADM (Flash Disk)
      serial console
      note: no CDROM drive after initial software installation

CD-Linux looks promising provided the following are overcome,

      only 100MB of ADM Disk can be used for Linux distribution

      current CD-Linux organization assumes a CD Drive is always available

      integrated build process has many interdependencies making it hard 
      to create a tiny distribution (make scripts within the distribution
      are used to make additional parts of the distribution.  this means
      the distribution must have many components to support distibution
      creation that are not needed by a minimal production environment.)

As an initial test the "edge" varient of CD-Linux was used as the boot disk
for a lab bench system.   Using the system allowed for a filesystem to be
created on the ADM and for the esential files to be copied to a partition
on the ADM.  The ADM partition was made the boot partition, the CD Disk
removed.  A usable Linux system now boots directly from the ADM with the
'edge' CDROM removed.  Less than 3MB of free space remains on the ADM 
partition.

Is this something I should be trying to do with CD-Linux?

Are others trying to do the same thing with CD-Linux?

Constructive feedback welcomed and appreciated.

Stan