User Mode Linux is really fantastic, and can do a lot. However, the requirements of UML and the problem it would be used to solve in this case make it a bad fit for what you want to do.

UML provides a complete, subsidiary and standalone Linux environment to run at "user-level." That is, you can run a Linux environment within a Linux environment - I've had Debian Woody running under Red Hat 7 before.

It can also be thought of as a "super-jail" or "super-chroot" environment.

However, UML needs memory+swap to use as the UML RAM space - and if you want KDE, you'll need 64M just for UML - plus the 64M for the host. In truth, 128M for both is better - meaning 256M or better for both.

Plus, it will be as if you have two hosts - which means configuring the host to accept data from the UML host.

All in all, wouldn't it just be simpler to make /usr/local writable and compile applications to /usr/local?