Yes, now the new kernels contains an embedded RAM filesystem as other Android devices (G1) which contains init and the other files in /, the userspace tarball that you must untar to mmcblk0p3 contains:

/cache
/data
/nokia
/system

So installation remains the same but you have to flash the new kernel, if you have extra stuff than the above in mmcblk0p3 it simply it is not used.

If you flash the debugging kernel in this release the wifi driver will not load or will hang the device as it is compiled for the normal kernel, I had to figure out how to ship different modules for the debugging kernel yet.

The debugging kernel disables all logos and animations and as usual enables screen console output so if you have problems please try next the debugging kernel and report back.

As there are many new features please report any problem as I probably don't check every single thing. Thx!