Building Reference Device on Wyse R00L?

Building Reference Device on Wyse R00L?

My WSM Pilot in a box came with a R00L with 2gb flash memory. I connected a usb DVD and loaded Windows XP SP3 from Microsoft distribution media. I now have only 59 mb of free space. How do I get the rest of the Microsoft updates and my applications loaded?

-Do I upload this basic build to the Core server, set the cache to private mode, boot a non-flash enabled R00L and continue loading?
-Purchase 2gb more flash for the reference device and build my image here noting that I can never exceed 4gb?

* A typical fat PC image for my School running XP Pro is around 10gb.