Rockbox Debian VMWare with all the latest cross-compilers. Has Debian 5.0.4 with 2.6.26-1-686 kernel and custom OpenVM Tools built for this kernel. Image is 4GB. 2GB doesn't seem viable any longer at all and is impractical for my use.
There is a minor audio issue with SDL Alsa (some crackling, SDL bug?). SDL audio has far lower latency now which could be the reason. I personally don't care too much about that. I'm not certain if the ES1371 driver is starting properly but there is simulator sound and the device appears to be recognized (shows in lsmod, lspci but not in dmesg).
Maybe more cleanup (removing unneeded junk) can be done? I tried to do my best without breaking any packages.
I did enough work on it for now (works for me). I'll let someone else finish the job for a viable VM download should they want to use this as a base.
Solid 7z archive:
Files used and notes on updating current VM: