After some research I don't think ext2 is a good choice for SD card partition Type. And ext3 is catastrophic. Ext2 tends to wear off the card with great speed, even with SD cards automatic anti-wear off protections.
Google on the topic and you will see it for yourself. Also Ext2 isn't very optimized for lots of small files. Neither in speed, nor size.

ReiserFS should be far better choice. It has a big edge over ext in terms of small files handling (the devs behind reiser stress quiet often on that). It is much more self repairing (I got lots of errors when running e2fsck on the SD card from time to time). It handles wearing off much better.

The only bottleneck I can think of now is the 32MB used for metadata. That's it. Even on empty filesystem you have 32MB used with metadata. On the other hand with 2GB cards costing $20 32MB is not that much.

Only two changes are required.
- Change bootmenu.conf to use reiserfs as parameter for partition type
- Provide ReiserFS support in kernel (either module or built-in)


I tried it, partitioned with reiserfs, modified bootmenu, cloned / and compiled kernel with reiserfs built-in. Boot time seemed a little bit faster compared to ext2 and also it seemed to use about 5-10% less space.

I have just to work out one problem, causing the tablet to hang for a while after loading the blue bar and to restart, which happened on a few occasions and then provide alternative instructions.