Thanks for the fast responses, guys.
Yeah ... I figured ... it might be just outdated info.
However there's something, I believe could be quite important, that I forgot to mention: after TC boots it seems to be using very shy amount of memory (something raging from 37 to 57 MB / 32-64 bit version).
Also: the binary I need to run in it is very lightweight - it requires only openssl as extra dep. and needs almost no memory, so with 256 MBs of memory the VM boots, and then it has around 180 MB memory available, as reported by `free`.
So I figured there's something that happens on boot in RAM that prevents it from booting, and then the 128 MBs would be more than enough ... I thought it's loading too much in memory on boot, related to mounting/decompression/udev/something else (really not knowledgeable enough to know what happens then). Hence my post here, in search of the right configuration/troubleshooting tips to figure that out.
Thanks again.