The software.....

Huge shout out to Whufcle

his post at http://totalxbmc.tv/new-forum/index.php?topic=137.0 was what I used as a starting point

the gist is this, the sd card is formatted as fat32, and has all the normal pi files on it, and additionally the SYSTEM file for openelec, the USB stick is formatted ext4 as is mounted as /storage

the nice thing here where most people goof up is they use references to SDA or SDB and if you have another USB stick plugged in, you may not end up booting correctly, in cmdline.txt we are setting it to mount the partitions by LABEL

So its not perfect still, if you plug in a USB drive with the label SYSTEM or STORAGE things may go bad, so lets just not do that mmmkay?

Out of the box update all your addons, grab a skin to use, I prefer xTV for the kids

we are 80% there, now we just need to....

1.) enable lirc_rpi

2.) get the SNES controller working

3.) be able to autoresume what was being played before power was cut

4.) turn on the monitor on bootup

5.) add games

6.) more... cool stuff?