I just used an extra microSD (4GB) to build my own Debian lenny chroot. I think it's not good to mess with the disk layout of the N900. So using a chroot on extra microSD you don't have any limitations beyond the microSD and don't loose any functions, such as regular firmware updates. You also can use multiple chroots on your microSD, so you are also able to install http://repository.maemo.org/stable/fremantle/armel/.