Live-CD and sda /config persistence layer

Does it make sense to use a sandboxed environment like the live-cd and allow only the config directory to be persistent?.
Using this method I can not only save a lot of storage space (the minimum installation size is 1GB!) but also retain the configuration across every reboot.

For this purpose I formatted 10MB of an ext2 partition (sda1) putting “live-rw” as label and changed the isolinux.cfg to be persistent, then I copied the whole /config directory into /dev/sda1.

Needless to say I had no luck on this, this doesn’t work as I would expect.

How can I set the vyatta-union to allow a partition to be mounted as /config ?

Thx a lot this is a great open source project!