For a new userland, I'd simply use the latest BusyBox (www.busybox.net), with nearly *everything* configured for busybox. This would give us nearly 200 very useful userland commands, all in one executable (with lots of symbolic links to itself) that might weigh in at around 500-700KB total. Or slightly more if statically linked with uclibc (instead of glibc).

Built-in webserver, telnet daemon, networking utilities, shell utilities, SHELL (ash), init, etc..

Practically nothing else required except the stuff under /empeg/ and a few files in /etc/ to have a VERY functional Linux system. In less space than the current bash executable alone!

Cheers