first of all, You need to unpack img. Use lzma (from terminal, or any GUI program You like) to achieve it. For casual users, I strongly recommend unpacking on desktop/notebook, then transferring image file itself to N900. Without proper swap-related configuration of Your N900, You can have unresponsiveness/reboot problem while unpacking.

Unpacked image is 3GB file (ed-squeeze-final.ext3). Place it somewhere - for example, on MyDocs. Then, edit /home/user/.chroot file (You should have it, as You installed easy chroot), find appropriate line (every option is explained in #comments), and edit it, to point into Your file, i.e. /home/user/MyDocs/ed-squeeze-final.ext3.

Thats all. For more detailed informations, please refer to Easy Debian Wiki page.Also, keep in mind, that using image file, performance won't be amazing - 'cp -a' image file to dedicated partition (little more advanced topic) would give much better results.

/Estel