After a couple days of tinkering, I still can't figure out where the chroot is getting it's default path information under sh.

But, BASH is much easier to change. Change /etc/passwd so that 'root' and 'user' use /bin/bash instead of /bin/sh. Then alter /etc/bash.bashrc (under the EasyDebian chroot) and add
PATH=${PATH}:/any/other/paths:/more/paths
to the end of that file. If you don't want to do the ldconfig I mentioned earlier, you can also add a LD_LIBRARY_PATH to the end of this file. (Don't forget to export LD_LIBRARY_PATH). Ldconfig is the cleaner way to go though (for the purists out there).

PS1 (the default prompt) is set in /etc/profile. Mod it to your hearts content.

Finally, if you want to be able to 'su user' (so you aren't root all the time), you will need to change /etc/login.defs. You will want to change the line that starts with ENV_PATH to be the non-root users default path. If you want to 'su back to root (say from LXDE), you might want to do the root version right above it too.

There you go. A working set of environment variables for development.

Add in this cable mentioned in this thread attached to a USB keyboard (Walmart) and I'm good to go!

Great part is that none of this affects my 'default' maemo environment (different lib versions, etc), and since the partition is on the external card, it doesn't die if I have to reflash!

For those worried about space, I took the full EasyDeb package, ran localepurge, bumped it to a 3G partition, downloaded most of the Gnu toolchain, subversion, a couple of (largish) custom libs, xmeacs (hoping to use with usbmouse.deb (didn't work)) and the current projects I am working on. I still have about 1.5G of my 3 left.