Serge:
I have a 3.4 image with bare Morphic and development capabilities.
We used it on iPaq 3600 with 32 mb and do commercial app.
You can do development in normal environment and fine tuning and final ajust
on a image withing 3.7 mb.
I have a demo of final app morphic on
http://ar.groups.yahoo.com/group/squeakRos/
It's a Spanish beginners group oriented, but have a "Archivos" (Files)
section where you can find LogicCircus , sigle gate circuit emulator buided
with this.
I'm afraid because not having now ADSL cannot send to you like I do to some
members , hope you are lucky with restrictions of yahoo groups.
Can contact me on edgardec2001 at yahoo.com.ar or edgardec2003 at ciudad.com.ar if
need more info.

Cheers.
Edgar