I have to start off by saying that I am eagerly awaiting the release of CM7 just due to the amount of fixes that have been implemented in their release.
However, this IPK based solution is actually not bad. I can see it being useful for people who are too afraid of doing any serious damage to their device and will stop after preware is loaded.
Now in the OP's Youtube video there is a clear issue with the available disk space and that can be fixed by doing the following assuming you have preware and webosquickinstall ready and available for use. I tried to post these commands on touchpadsupport but for one reason or another my account isn't working.
Anyways, the filesize starts out as ~165MB. I added another 256MB to the image using the commands below.
To do this reboot your touchpad and/or ensure that you do not have the Android release loaded. You can hold the home + power button until the device restarts.
1) Using WebosQuickInstall, go to 'Tools' and click 'Linux Command line'. All commands will be issued from the Linux Command Line terminal window
2) The system.img file is stored in /media/internal. Execute cd /media/internal to change to that folder and then Execute cp system.img system-bak.img. This will ensure you have a backup just in case.
3) Execute dd if=/dev/zero bs=1M count=256 >> system.img - Please make sure you are in /media/internal directory
4) Execute e2fsck -f data.img
5) Execute resize2fs data.img
6) Execute e2fsck -f data.img
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