I was thinking about the way tinycore works and had a few thoughts.
The way it handles `mydata.tgz` strikes me as inefficient, having to save and restore this file with each shutdown and boot. I would think a directory union (unionfs) would be a much more efficient approach and robust. I don't think the fact that `mydata.tgz` if a tar archive is really the most important thing --after all that's easy enough to create on demand. But if keeping to one file is important than alternately, a virtual file system that accesses the tar archive dynamically with fallback to the real file system would be another more efficient and robust option.
Another thought, wouldn't it be good if there were per-user "mydata.tgz". That is, when a user logs in then their home files come on line. instead of restoring every user's home files on boot? This wouldn't be needed for most embedded applications but it seems like it would be good option to have for other usecases.