ok. 

I poked some more at the spin and managed to get it back to under size
with dropping the following: 

gnumeric (do people really need a spreadsheet on a live media?)
gimp (as pointed out, gimp is very cool, but it's not really something
people trying out Xfce need to use/see). 
some aspell dicts

This takes us down to 695MB. 

Thoughts?

kevin