It can be done -- very easily. It takes about 30 minutes of your active time and about 3 hours of inactive time (while the operating system is transferred to the SDHC card). If you're comfortable with Gentoo, it's a snap.
I'm successfully running Gentoo using a Kingston 4MB and a Kingston 16MB card. I'll be trying a 32 MB card tomorrow. Please see my post at the BeagleBoard forum re: Gentoo https://groups.google.com/forum/?fromgr ... qWxtUtLH9E