1) I would suggest the minimum size partition you need for OS 2006 is 256MB, that's roughly equivalent to the size of the internal (128MB compressed) flash memory. 512MB for OS 2006 should be ample.

2) Yep, no problem

3) Yep - tar up the content of the OS2006 partition on 1GB MMC and then untar it on your 2GB MMC. Once you've mounted the card on your Ubuntu box, cd to the root of the partition and create the tar as follows: "tar cvzf /tmp/os2006.tar.gz /" then swap the MMC cards and restore the clone using "cd <root of mmc partition>; tar xvzf /tmp/os2006.tar.gz". That should work, or something similar... If you can mount both cards at the same time you can pipe the output from the first tar command into the second tar and avoid creating a temporary file.

4) Not sure about mmcblk03...

I think someone else asked some of your questions in another thread (probably the OS2007HE thread) - you should check there.