This seems like the best solution to me. Perhaps now that the camera is working with non FAT partitions the loopback file is not necessary. Although mass storage mode might not behave without it. Also, would ext2 be preferable to ext3? What would be useful would be a guide or a script to set this up, I wouldn't really trust myself to do this properly. One other thing somewhat related. How trustworthy are programs with regards to putting large files in /opt? is it likely that one will ever run out of space on the 256mb NAND flash? Might mounting /usr on the internal card be necessary?