Heya guys, sorry i haven't been on much recently. Not much spare time.
I've been meaning to write up a how to, but yeah time!
Basically you need a *nix(my case debian) buildroot (for ARM)
i've chucked up a working initrd and kernel at
http://code.google.com/p/debianiphone/downloads/lista standard debian buildroot *should* run fine (deboostrap), the kernel has the ttyusbserial gadget i would recommend installing wireless-tools and wpa_supplicant (if you're using WPA/WPA2) and writing the config before deploying (wpa-passphrase [ssid] [password] > myconfig) .
for the ttyusb serial gadget when the kernel is up and running on osx it pops up with a new serial device blah blah close it and use screen /dev/ttyGS0 (on osx) to connect to your phone (and drops a linux prompt) (you could just as easily add an init script to bring up wireless on boot)
I don't have access to a 2G anymore so it makes it a little hard to test
xorg works out of the box, i haven't been following the idroid kernel progress much but chances are my kernel is waaaaay out of date.
Hopefully sometime soon i can get back into working on it(I'd love to see debian on the iPad with awesomewm

)
Hope that was pretty clear, typed in quite a rush!