[gentoo-embedded] root on squashfs+aufs

[Ed W]

Hi, I'm interested in hearing how others have managed a root filesystem 
based on squashfs (or similar) with layering using aufs (or unionfs)?

I am building an embedded box and it looks like it would work well to 
have a simple package manager based around a bunch of squashfs 
partitions which layer on new functionality for certain builds (and it 
would allow some versioning).  On the top of that we need a writeable 
bunch of configuration files which we might do either with symlinks or a 
writeable top level partition (still undecided).

Mainly interested to hear how others have managed the boot process and 
built their initrd/linuxrc?  I'm sure I read about at least one person 
on this list calling a similar setup "squashfs packages"?

Thanks

Ed W