I think Kix makes a good starting point and have remastered it many times.I hope the info on my homepage helps.Kix has the 2.4.19-xfs kernel so it's not to bad

When you first get Kix and boot it to look around you can startx clean by saying "startx /usr/bin/blackbox" I also say "knoppix 2" at the boot prompt so it dont try and start kde then fail to a prompt.Heres a few tips :

1. Say "deborphan" and remove the 54meg of orphaned libs left behind.
2..Add "xdialog" to make the knx-hdinstall script run agian and also replace the script with the 0.30 version if you want it to run in english (dont forget the templates in /usr/local/lib).
3. Use the boot-en.img from a Knoppix cd to get rid of the german keyboard.
4. Give the "knoppix" user a password so you have the option to login as knoppix or root.To do this just say while chroot "passwd knoppix" and set a pass.

If you go with the 210meg mini-cdr's you can have around 550meg uncompressed (max).
I remove all kde,wine,isdn and gimp,xfonts-intl,gpsdrive,zsh,psi,cdbakeoven and add icewm,xcdroast,xfm,mozilla-browser,eterm,sylpheed,along with a bunch small fast gtk and tk apps.

Another good starting point for a mini-cd is the lnx-bbc.You can build you own online with gar/cvs and it can also be remastered and uses cloop..they invented cloop.Find out more here : http://www.lnx-bbc.org/

I also just found this bbc with the 2.4.20 kernel : http://rescuecd.pld.org.pl/