You already installed lots of applications, option-2 would erase these applications and all of your settings and all of your data.
While option-1 might just change the sizes of the partitions without losing data or settings, but you may nevertheless try to reset things.
The choice is yours!

EMMC_By.MiDO.FaYad.7z = 5 GB opt
(bin file MD5 = d9e7e78e720c09a3a2d5921f4621e71a)

EMMC_By.MiDO.FaYad.8.giga.7z = 8 GB opt
(bin file MD5 = 6c705d258e847472b2d355408018547e)

Both files are trustworthy (without malware).

Personally I'm an Option 2 kinda guy.

I'd wipe everything and start again but that's just how I like to do things and it may not be best for you. My reasoning is that although it should be possible to do things on-the-fly, wiping everything and starting again clears out the cräp, and also reduces the chances of home-made modifications clashing somehow with something else (doesn't really matter what, and there are as many ways for a system to go wrong as there are electrons...) and causing issues either immediately or - even worse - further down the line. So it might actually be simpler to do that.

This is my opinion and it's impossible to quantify how right I actually am. I'm not a Unix guru, but I have half a clue what I'm doing and I'm no stranger to a shell.

Whatever you decide to do, good luck - and let us know how it goes. If you get stuck I'm sure we'll do our best to help. If you do come across any issues, make sure to include as much info as possible, including commands entered into shell or command line, and full output.

Thank U so much michaaa62, kolos and shallimus. Today, I flashed my N900 using the option#2 and I was able to do it successfully. Moreover, the app memory has increased to 8GB. Surely, this wouldn't be possible without your guidance. Initially, I was not feeling positive to this by myself but I had faith on you guys. I am very thankful to all for taking time and helping me out.

Hi Guys,
After flashing my n900, I am not able to enable Maemo Extras, Maemo Extra-testing or Maemo Extra-devel. I am not sure what might be reason. However, I am providing the link of the picture which shows the error message it is giving when I try to enable and use them. Please help me in this issue. Thanks in advance!!

http://flickr.com/gp/8864236@N06/6Tj4C7

It's "fremantle", not "freemantle".

It is far simple than above comments. You have to flash the .bin file with maemo flasher. Make sure that you make a backup of ALL , because you have to flash mydocs (emmc) and then rootfs(Ifirmware file)

hope this help =)

Thanks for correcting me.

pls, guys just got my phone flashed cuz of low installation memory. downloaded the mido fayad 8gb partition but kinda confused if using mido to flash will not affected the custom app on the fone, pls rsvp. ND DO I BACKUP MY CUSTOM SETTINGS AND APPS. IM NOT SEEING BACKUP MENU IN REPOS.

You can use native backup app to backup all the contacts, messages and settings and save the file in the memory card. While flashing you will lose all the installed apps. Anyways, after flashing you can install them right away..