how big is your ext2 partition?

That looks like a pretty big FAT partition you have. You can probably make do with 256meg for FAT.

My 1GB card is partitioned like this:

/dev/mmcblk0p1 1,8000,6 (256megs FAT)
/dev/mmcblk0p2 8001,19355,, (600+megs ext2)
/dev/mmcblk0p3 27356,,S (128 megs SWAP)
/dev/mmcblk0p4 ,,, (nothing left over from above)

and with only a few apps installed, I use 30% of the root filesystem