AFAIK this list is for the kadischi project, which uses a patched
anaconda to build the FC4 image. It's a different liveCD project.
I've had pretty good luck with kadischi, but anything using stock FC4
(mkzftree based) will be slow unless you get lucky hacking it.
There are ongoing efforts to get unionfs and squashfs integrated as
kernel modules and that should drastically increase performance.
Consider trying kadischi for your project :
http://www.fedoraproject.org/wiki/Kadischi
Someone more experienced than I may be able to answer your other questions.
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SW