What if you loop-mounted a filesystem using aufs & chroot - similar to slax and linux-live?

E.g. My laptop at home does not have linux installed to the hard-drive but I have a custom slax install on my usb stick.

Of course the usb stick is read-only but a mounted overlayed filesystem is used to persist any changes.

For example when slax boots of the usb stick it looks for a file called 'slaxsave.dat' (a 3gb xfs-formatted file), mounts it and then persists all changes to this file.

This enables me to have a system that behaves like a "native" installation.

Is this feasible on the n900?