Woo, just did the above and seems to work well. Just waiting to see if bugs may appear
Bit confused as to what I should do. Will look a bit later when my head is a bit clearer.
First off, if you haven't already, flash Amon Ra's recovery onto your phone. Boot up into the recovery and use the partition menu to partition the sdcard.
On my 8gb card I went for a 96mb Swap partition, 512mb ext4 partition and the rest as fat32 for general storage.
Convert the freshly formatted ext2 to ext4. It's all explianed in this thread by Amon Ra.
http://forum.xda-developers.com/showthread.php?t=530492&highlight=amon+ra
Have a read through that and look at the images he's posted. It's all simple.
1) downloaded the userinit.zip from here http://forum.xda-developers.com/showpost.php?p=4817223&postcount=2851 as ElliorR said
2)extract it to the root of your SD
open up terminal
su
mount -o remount,rw /dev/block/mtdblock3 /system
cp /sdcard/userinit.sh /system/sd
cp /sdcard/user.conf /system/sd
chmod 755 /system/sd/user.conf
chmod 755 /system/sd/userinit.sh
reboot
3) check "free" in terminal again
4) win