This is a slightly modified LFS 6.4 (http://linuxfromscratch.org)
installation.
In the off-chance of someone deciding to play with it, beware
that it is _minimal_. It has the tools needed to compile software,
a text editor (vim) and ... well, that's it.
It requires some manual work to set up and is not guaranteed to
work well (or at all). ;)
That being said, on my machine it boots in under 5 seconds and
takes about 200MB for the whole system, which means it can be
installed on a partition normally used for swap. Cool.


So, here are some rough instructions on how to install.
First, you need to create the filesystem that is going to be our
root and extract the files there. You can probably use your swap
partiotion. Something like this:
#swapoff /dev/<XXX>
#mke2fs [-j] /dev/<XXX>
#mkdir -p /mnt/lfs
#mount /dev/<XXX> /mnt/lfs
#tar -xjpf lfs-<date>,tar,bz2 -C /mnt/lfs/  #dont miss the "p"

Then you need to edit fstab. It currenly has my devices. Remove
/boot if needed, and set "/" correctly.
#vi /mnt/lfs/etc/fstab

Now here comes another oops: you need your own kernel that can
boot your machine without loading any modules (or with just the
modules in initrd). It has to be a x86 kernel. You can try using
kernel-debel and kernel-tynyk, but they are not suitable. Debel
is a kernel that includes _alot_ of unnecessary stuff, I just 
took it from one of my machines. Tynyk is a kernel optimized
for my hardware, chances are it won't boot on yours.
Put your kernel somewhere where your own working GRUB (oops ;) can
load it: /mnt/lfs/boot, or just /boot (might have to be mounted).
Add an entry to grub.conf (or menu.lst) to boot the new system.
#vi /boot/grub/grub.conf
On my system it looks like this:

title lfs-tynyk (quiet)
root (hd0,0)
kernel /kernel-tynyk root=/dev/sda5 quiet

You need to modify almost everything here.


Now, if everything has gone well, and I haven't missed anything,
you should be able to boot. Reboot, select the new entry in grub
and in a few seconds you should see the init messages. You will
not see a login prompt on VT1, you need to hit ALT-2 and login
there with "root" and "toor".

If you have come this far - wow - I didn't expect it to work ;)