Great thread... lot of ideas and finally microSD in shortened "Trio TransFlash USB Card Reader" (thanks to littlestone) is working
Actually, I took disassembling instructions from (new299) new299 blog The way of removing cover of RSMMC socket was there as well...

Here we go. It is possible to use good old RSMMC and shortened microSD adapter in the same (modified) slot.
MMC RS 18mm x 24mm x 1.4mm
Adapter (after removing USB part and little bit more) 19.5mm x 24mm x 2.2mm

770 mod (I failed to make lock mechanism work properly - removing cards is not easy after modification. I don't do it often anyway)
1. Disassemble (covered in new299 blog)
2. Remove RSMMC cover and lock mechanism (covered in new299 blog), don't break MMC detect switch. Switch works fine after modification.
3. Carefully bend exposed contacts. (They should be around 1mm higher)
4. Glue cover back to the plastic part of the socket, but not into original position. Cover should be 0.8-1mm higher then original.

Adapter mod:
1. Disassemble adapter. Build quality is too bad. Remove excess of glue inside. Place cover back. Make sure that plastic and contact parts on the same level.
2. Cut off USB part and around 1 mm from board and plastic cover.
3. Glue everything back. Make sure that plastic and contact parts on the same level (!!!). If not you will end up with card stuck forever inside adapter.

Currently I have only one Kingston (cheap and slow) 1G microSD for tests:
(fanoush "speedy" kernel):
~ $ uname -a
Linux Nokia-N800-48 2.6.16.27-omap1 #8 PREEMPT Mon Nov 13 21:15:26 CET 2006 armv5tejl unknown
(Kingston - slow MicroSD 1GB):
/home/user # time dd if=/dev/mmcblk0p2 of=/dev/null bs=8192 count=10000
10000+0 records in
10000+0 records out
real 0m 34.76s
user 0m 0.03s
sys 0m 2.96s
(MMC 2GB Kingston):
/home/user # time dd if=/dev/mmcblk0p2 of=/dev/null bs=8192 count=10000
10000+0 records in
10000+0 records out
real 0m 16.90s
user 0m 0.04s
sys 0m 3.41s

(original Nokia kernel)
~ $ uname -a
Linux Nokia-N800-48 2.6.16.27-omap1 #1 PREEMPT Tue Sep 19 16:46:58 EEST 2006 armv5tejl unknown
(Kingston - slow MicroSD 1GB):
/home/user # time dd if=/dev/mmcblk0p2 of=/dev/null bs=8192 count=10000
10000+0 records in
10000+0 records out
real 1m 2.02s
user 0m 0.03s
sys 0m 2.78s
(MMC 2GB Kingston):
/home/user # time dd if=/dev/mmcblk0p2 of=/dev/null bs=8192 count=10000
10000+0 records in
10000+0 records out
real 1m 0.97s
user 0m 0.07s
sys 0m 2.74s

No comments about speed testing - thank you, fanoush! (just waiting for new initfs with WLAN memory corruption fix ...)
Today is 10-th day when my main 770 is running OK using 1G microSD in adapter with boot from MMC, sorry, microSD, into 2007HE-2.

Thanks everybody again for a lot of great ideas!

serge48

PS. Still tempting to order 6G microSD (I know, I'll need new kernel), 8G card is only available for preorder in UK.
PPS. I'll put some images tomorrow. Just changed notebook and should sort it out first.