That's the basic idea. I've been playing a bit more with it, and here's what I am using so far on my 1GByte Sandisk RS-MMC card:

1st partition: large FAT (I think it's type "6" in the Linux fdisk program) partition. I used the identical partition type the 770 software sets up if you format the MMC card using the stock software from Nokia. I selected the 1st partition because the 770 defaults to mounting this partition as the memory card (probably an entry in /etc/fstab that I need to check). I decided to leave the "stock" config alone as much as I could. I noticed that the partition is flagged as bootable, so I left it that way.

I also created a 16MByte swap file on this section.

2nd partition: Dedicated swap, 64 MBytes. Activated manually (run swapon as root in the 770).

3rd partition: ext3fs (journaling file system; more forgiving of sudden unmounts if I pop the MMC card or plug in USB!). I am assuming the 770 kernel has ext3fs support. If it doesn't, no biggie - the kernel should mount it as an ext2fs partition. I currently mount this manually. So far, I haven't tried using it for very much.

After I do some more playing around, I will edit /etc/fstab and/or create some shell scripts to allow me to mount and unmount swap files, swap partitions, and make better use of this storage.

To create these partitions, I connected the 770 via USB cable to a Ubutnu Linux desktop system. The Linux system automatically mounted the partition(s) on the MMC card, so I had to unmount them first. I then (as root on my desktop) used "fdisk -l /dev/sda" to see what partitions were on the MMC and "fdisk /dev/sda" to change them. (My system mounts USB devices as if they were SCSI devices; your mount points may vary). You could also edit partitions by removing the MMC card from the 770 and using a card reader, or install fdisk on the 770 and run it locally.

Once the partitions are created, you need to format them using mkfs.vfat for the FAT partition, mkswap for the swap partition, and mke3fs or mke2fs for the Linux partition. You use the "swapon" and "swapoff" commands (as root) on the 770 to make swapfiles or swap partitions active.

What you really want are the built-in commands for the busybox shell the xterm makes available, or for the bash shell if you use that. And tips and tricks on customizing your environment to load $PATH, library file paths, and provide command shortcuts (like launch an ssh session to a system you access regularly). The situation will get better as more people figure out and document what works well. In the meantime, there are numerous books and web sites on beginner shell commands that should get you started. Busybox appears to use a subset of commands used by the bash shell, so the many tutorials on bash should be of some use.

I've been using my desktop linux system to edit the various files (easier to have a large display, keyboard, and keep open windows to various web sites that way). I then copy the files to the 770 (via USB, could also use scp or place onto a web server and download) and install them where needed. I could do it all on the 770, but I find it easier this way.