Indeed. It's also possible to get a working 770 by removing the MMC card: the unions just won't be mounted when you boot and you won't have dangling symlinks instead.
Effectively you can mount the unions at any time, but the setup script includes an /etc/rc2.d script to mount them at boot, if the MMC card is present.
So, in my /home/user I have both the Ice Age 2 trailer which is in /home/user in the internal flash; and "Rise of the Cybermen" ...