Onwards and Forwards and whatever-wards is after that...
Remember, these are my own thoughts and should not be taken as "gospel", just thought I would help with information in plain English...
Since this has kind of become an, unofficial, thread for information as well as others things of interest about rooting, I thought I would add some more bits in here.
SD Card Partitioning - Should I? Why and How?
Before Froyo App2SD, there was a 3rd party mod that allowed users to move installed apps to run off the SD Card. This required re-partitioning of the SDCard and allocating space for it. This allowed users to install more apps and have more use out of their devices.
REPATITIONING DELETES ALL DATA ON THE SDCARD!!!
Is it still NEEDED with the Nexus One? In essence, No, it's not, but there are good reasons to do it.
1. Install more apps!
Of course we all want apps, we all want as many apps as we can and not have to decide which ones we need more than others.
2. Google's App2SD wasn't very well thought out...
Honestly, I am not sure what they were thinking with this. Maybe they didn't want it to be "too complicated" and risk everyone screaming about losing all of their data on the SD Card when it was re-partitioned... Who knows.
Reason I am not a huge fan of their implmentation of it is because it uses the FAT32 native partition to move the apps to it. Why is this bad? Because when you move apps to the FAT32 parition, where your data is also stored, and you mount the SD Card to access from your PC, the device can no longer access the apps on the SD Card. For poorly written apps, this can cause a LOT of issues, to the point of needing to uninstall/reinstall.
Using the "old" method of having them installed to an EXT parition on the SD Card avoided this issue.
3. Get even more space!!
With Enomther's 2.11.3 ROM installed, I had about 60MB available spcae to install apps/data on my N1 (this was after I re-installed all my standard apps). I moved Dalvik Cache to /cache and reclaimed 70MB+ which took me up to around 131MB free to have apps/data...Now, with ext3 partition and having even more apps moved to SD, I have 162MB free now. And trust me, I'm not going easy on the apps...
4. Any other reason?
That's about it really.
Partition Types:
Ok, how, there are discussions out there about ext2/3/4 and which is better than the others and also the Linux Swap Partition.
Here's the breakdown in human-ish terms:
ext2 - Older file system with larget block sizes which is inefficient in using space (lots of wasted slack space).
ext2 - Wikipedia, the free encyclopedia
ext3 - Advantage is journaling which improves reliability and eliminates the need to check the file system after an unclean shutdown.
ext3 - Wikipedia, the free encyclopedia
ext4 - Journaling from ext3 plus the file system offers enhancements like delayed allocation.
ext4 - Wikipedia, the free encyclopedia
Thing to note here is that not all ROM's like ext4. Even though it is backwards compatible, there have been some stability issues with some ROM's and ext4. I would check with the Dev and see if they support it. Otherwise, ext3 is the safe bet.
Linux Swap on SD Card. Honestly, with the Nexus One, I would not make a Swap Parition. It was needed on older devices that had a LOT less memory and it was advantagous to move it to the SD Card, but no, not so much.
Some people have tried moving Dalvik-Cache to SD rather then to /cache like I mentioned a few posts up. My only quibble with doing this is that SD Cards are SOOOO much slower than internal RAM so I don't see a benefit of moving it to anywhere other than /cache.
the /cache partition is something you will never use when running a custom ROM because you will not get OTA's to stage there, so no reason to NOT use it.
How to Parition:
Easiest way is to use Amon_RA're recovery to do it. It's fast, easy and almost error-proof.
My setup:
16GB Transcend Class 6 SD Card
0mb Swap
1024 ext3 (1GB)
Remainder on FAT32
Now, with Amon_Ra's recovery, it initially makes the ext partition ext2, you have an extra step to make it ext3. Don't forget to do it.
If you are REALLY wanting to try it manually, there is a great how-to here:
How to manually partition your SD card for Android Apps2SD