I guess it must have only been a problem on my side, because debootstrap kept failing for me while trying to use the default script.

Are you going to put up screen shots or pics of the n800? I would like to see this in action =D

I would if i was able to get the virtual-keyboard to work in Ubuntu , i'm still trying to hunt down what keeps crashing the desktop when ever i press a key with matchbox-keyboard/xkbd/xvkbd/ubuntu-virtual-keyboard. If anyone could help in fixing this problem, i would really, really appreciate it.

The keyboard issue is finally fixed and i've added a screenshot, take a look.

Just a couple things:
1.) Near the end of the 1st post, you say to chroot and then you start to mount /dev, etc. You either have to exit after the chroot or switch around the order of those commands (you can't mount /dev or /dev/pts, etc while you're in the Jaunty root).
2.) I'd include instructions to activate swap. I'm guessing this is something you've already done, otherwise I'm not sure how you got this to install without it...It's not essential for the bootstrap process, but gnome dependencies and especially the locales are gonna require a bit of RAM to avoid crashing.
3.) I see from your screenshot that you have composite shadows enabled. Is that slowing it down significantly or is it about as fast?

Thanks for the tips and for pointing that error out , i'll update the guide sometime tonight or tomorrow.

Also, i havn't encountered any significant speed los in activating the composite manager. But that might verry depending on how much swap you use. I'm currently using 356mb of swap.

UPDATE: applyed the changes

I only seem to be able to get the debootstrap to work from another debian (Deblet, ubuntu). It keeps stopping at the very beginning with this error in Maemo:

Nokia-N810-43-7:/mnt/jaunty# debootstrap --include="language-pack-en,language-pack-en-base,dmsetup,cryptsetup,hashalot,nano,sudo" --components=main,multiverse,universe,restricted --verbose --arch=armel jaunty /mnt/jaunty http://ports.ubuntu.com/ /usr/share/debootstrap/scripts/jaunty
I: Retrieving Release
I: Retrieving Packages
I: Validating Packages
W: http://ports.ubuntu.com/dists/jaunty...el/Packages.gz was corrupt
I: Retrieving Packages
E: Couldn't download dists/jaunty/main/binary-armel/Packages

This happens both with the debootstrap package from launchpad jaunty and the jaunty file posted in the first post in Maemo. Both Deblet and Ubuntu debootstrap this just fine.

Any ideas why Maemo would be choking like this?

/bin/md5sum missing (get it from deblet)
binutils not installed

binutils is the one from chinook repos (could this be the problem?) I think debootsrap depends binutils. Which binutils are you using?
Also, I see no /bin/md5sum in my maemo install, but jaunty install doesn't have it either and it debootstraps fine.

Right. It's probably in /usr/bin/md5sum on your jaunty install. Again, grab md5sum from the deblet installer deb (just unpack it and grab it from within the tree) and put it in /bin/md5sum or whereever it fits