Installing Software on MMC

From Internet Tablet Talk

The Extended Root Filesystem Howto now addresses this topic. It's not a trivial modification, requiring root access and involving extensive modifications to systems files that can render your device unbootable (although nothing a reflash can't fix). The howto has scripts to make it as painless as possible, though.

Another option is to boot the entire device from an MMC/SD-Card. Instructions in Alternative 2 are recommended. Note that you will need access to Linux to repartition the card, although something like partition magic might work in Windows.