I simply followed the howto (I also installed udev, watchdog and libstdc++ and did an opkg upgrade, and I downloaded kernel modules for power and battery management). This is my shr.item:

ITEM_NAME="SHR"
ITEM_KERNEL=2.6.28-omap1
ITEM_MODULES=ext3
ITEM_DEVICE=${EXT_CARD}p3
ITEM_FSTYPE=ext3
ITEM_FSOPTIONS=rw,noatime,errors=remount-ro,commit=3

IMPORTANT: you have to use the standard kernel, NOT power kernel, during the installation process.