BobaHoTep:
I think the problem you're having is the way you're creating the archive. Open the archive in some viewer like file-roller and verify the first directory should be "etc" or maybe ".". If it's KoboRoot and not etc then you need to cd KoboRoot then "tar czf KoboRoot.tgz .". I'm not sure that last code with tar command is 100% correct but it looks right. If that doesn't help then this is what my files look like...
my setup was like this
append the the very bottom of rcS the mkdir and mount for pts
rcS2 doesn't exist
here's my inittab
Code:
# This is run first except when booting in single-user mode. .
::sysinit:/etc/init.d/rcS
::respawn:/sbin/getty -L ttymxc0 115200 vt100
::ctrlaltdel:/sbin/reboot
::shutdown:/bin/umount -a -r
::restart:/sbin/init
# ::sysinit:/etc/init.d/rcS2
::respawn:/usr/sbin/inetd -f /etc/inetd.conf
Note 1: And if your archive contained KoboRoot you might have a directory /KoboRoot which is just taking up space. Even if it's only a few kb.
Note 2: If you update you will probably lose ftp and telnet. I can't say for sure but I updated and lost both and had to redo the koboroot archive thing again to get it back. You can update even by just pressing the sync button it checks for updates.