"endso, why are you trying to build a "live" image? and why do you want it to fit on a usb/portable device?"
Well I don't want to just build a "live" image and for it to fit on a usb/card portable device...I also want it with everything needed for the 770 up to the n900...and I want it a rolling release (and somewhat stable too)...I just don't want my cake and eat it too..I want the ice cream, pie, cookies and donuts as well.
A live rolling release portable(usb/card/whathaveyou) distro means you can simply update the system...it isn't "fixed" like a mosquito in amber waiting for Jurassic Park.
I can't imagine everytime a new distro or software update, fix, patch, or whatever comes out ...I'd want to redo everything...and in the best of standard distros ...with their 6 month release cycle...it won't take long for it to be outdated.

Well qtsdk is done and available as per the cloud-link I've put up...
I would love to put up scratch...perhaps doing it so the n900 sdk is part and parcel of the live distro...but not a pre-set-up environment...simply ready-to "expand"....and take up the monstrous size it needs...(perhaps a one-click sh-ing download-install-automount script would be an idea...to simplify and make the whole she-bang swift problem-and-human-typo error-free the process)
Yet again ...so far...this is only for the n900..and that isn't enough for me...tools and availability for the n8x0 and 770 included as well ....in a live distro would be.

Thanks though...and yeah...I wasn't expecting it to work...worth a try though to see how the whole thing would behave...the results could have been worse...with the live distro completely non-functional due to ...whatever ...
as it stands I do now see exactly the limits of such a process and what it can take and what it can't.
If I didn't try it I'd be always wondering if it could have worked....everything installed and ready to go...
The built-in ceiling of live distro installation / creation has a limit...don't see any distro's to install that are 6 or 8 or 10gb in size ...don't think they were ever meant to be that big...yet...
most live distros brag about how small they are...
I think the limit in size in burning or creating one (especially a live one) for that matter is...for the time being... 4gb-ish.
So now I know what to work inside of... how full I can pack it and what complexity it can take.