Ok here's a pretty much step by step guide of what I did. If you install unzip you could do this 100% on the nokia, but I didn't feel like installing unzip so I just used my Windows PC to unzip the Zimage and put in on the mmc card via usb.

Before doing this, make sure you have xterm and becomeroot installed. I'm pretty sure it's required to access the kernel.
This was all done while booted from the MMC, I did not boot to the internal flash.

1. On my PC,downloaded the Zimage from here.
2. Unzipped the file and copied it to the mmc card via usb. The file should be called zImage-su-18-200639-2gb-mmcplus52Mhz-multiblockw
3. Once on the mmc card, I copied the zImage from the mmc card to the Documents folder, just to be on the safe side I wanted the flasher and zimage in the same place. Now with ITOS2007 this has to be done from the terminal because filemanager can't manage files on the mmc, its a bug.
I think the command I used was:
"cp /media/mmc1/zImage-su-18-200639-2gb-mmcplus52Mhz-multiblockw /home/user/MyDocs/.documents/"


4.On the 770, download the following kernel flasher file from here. Save it to your documents folder.
5. Open X-term and give your self root access by typing "sudo gainroot"
6. Change directories by typing "cd /home/user/MyDocs/.documents/"
7. Uncompress it using the following command "tar zxvf kernel_flasher.tgz"
8. Change directories by typing "cd kernel_flasher"
9. Flash image by typing "./kernel_flash /home/user/MyDocs/.documents/zImage-su-18-200639-2gb-mmcplus52Mhz-multiblockw"
10. Reboot by typing "shutdown -r now"

And of course all commands are typed without quotation marks. You could also shorten the zImage file name to make it easier on yourself, but I didn't.