I posted earlier on how to use SliTaz using USB installation. If you are using a 128 MB pen drive then you may find that you are in a space crunch. At the same time lzma takes a long time for decompression. I have made a few changes in tazusb to support bzip2 (level 9) compressed rootfs which you can download from here. Remember the following –
1. First install the bzip2 package. It is not installed by default.
2. Backup your old rootfs.gz in case something goes wrong.
3. Change your syslinux.cfg file to point to rootfs.bz2 instead of rootfs.gz. I have uploaded my own syslinux.cfg. Search for bz2 and you will find the entry I use.
# tazusb writefs bzip2
These modifications are for USB backup only.