I post this to help any user of this machine: This howto also works for ubuntu 12.04 but unity taxes the machine quite a bit.
Bodhi is the BEST linux distro I have used on this quirky machine. It takes some hacks to get it working completely sound/wifi won't work off of the iso. One must install last kernel made for Ubuntu Mavericks: 2.6.35-32-generic and boot with flags. All of that need be added to the CD boot command line.
A USB installer or install doesn't seem to work past Ubuntu 10.10 Mavericks.
I did the install this way (if cd is not an option, but if cd is, parts of below still relevant):
I had intel atom asus eeepc 901 so any i386 machine will probably do (choose "something else," choose target and don't bother with swap space:
Install Bodhi onto a usb device and upgrade the install to latest packages. Reboot for good measure. Install gdebi and perhaps gparted and dump if the intention is to transfer it to the internal drive.
Add the flags
via_agp.blacklist=yes xforcevesa=xforcevesa nomodeset vga=785 psmouse.proto=bare
to grub at the appropriate place in /etc/default/grub (before "quiet splash"), but don't plan on a reboot on original machine (unless you know the ctrl-x and edit grub lines before boot).
Install the above kernel (link below). Have an Internet connection even during the kernel install because it has some dependencies that are in the ubuntu 12.04 repos that Bodhi uses.
I found a copy
Use gdebi because it requires dependencies. dpkg -i will frustrate you.
sudo gdebi linux-image-2.6.35-32-generic_2.6.35-32.67_i386.deb
If you want the matching header files, do that by installing the -all header dependency first.
You need to add this to an /etc/X11/xorg.conf file before booting on the oqo
Identifier "Configured Video Device"
Option "VBEModes" "true"
Option "EnableAGPDMA" "true"
Option "AccelMethod" "EXA"
Option "MigrationHeuristic" "greedy"
Option "SWCursor" "true"
Option "HWCursor" "false"
Option "Composite" "Enable"
Then boot the OQO 02 off the USB you just installed Bodhi to.
If you get to this point, you'd most likely know how to partition the internal drive w gparted, use dump to best copy the running file system, find the uuid, change fstab to the teansferred fs, install grub to the internal drive (I'd chroot the internal partition and run dpkg-reconfigure grub-pc). I didn't include much here because it is not oqo specific.
dump 0f - / | (cd /media/target ; restore -rf - )
target replaced by path to drive or partition
sudo blkid -c /dev/null
and copy uuid to clipboard
sudo leafpad /media/target/etc/fstab
and paste over the uuid
chroot as root or sudo each line
mount -o bind /sys /media/target/sys
mount -o bind /proc /media/target/proc
mount -o bind /dev /media/target/dev
mount -o bind /dev/pts /media/target/dev/pts
chroot /media/target /bin/bash
follow the prompts
should boot from internal drive now