mozzwald.com

Thanks to sweetlilmre we now have U-Boot with "proper" shutdown. Basically sweet's code puts the Zipit into deep sleep when you halt the system from linux. When you press the power button or plugin AC power the Zipit will turn back on. It's pretty much the way it worked with the old blob bootloader.

If you'd like to try compiling your own, check out Geordy's instructions and here's the irc log with some minimal instructions for adding the code:
[13:19] (sweet_away) mozzwald: this one is sleep friendly and tested (flashed): http://pastebin.com/sf8vWzBy
[13:20] (sweet_away) save the contents as wakeup_macro.h in the board/zipitz2 dir, #include it in lowlevel_init.S and replace the call to pxa_wakeup with z2_wakeup

Now that U-Boot and the 2.6.35 kernel are out for the Zipit, a newer rootfs in order. I've tweaked z2buntu and got X running with lxlauncher.
lxlauncher
I like lxlauncher because mouse is not required to navigate through the menu. After you have programs running, you can return to the main menu by pressing CTRL-D and cycle thru all open windows with CTRL-N. Mouse does work and can be enabled by pressing the Options key. It seems that you have to cycle pressing Options about 5 times before the mouse starts to work correctly. My gui-based wifi configurator isn't quite ready, but you can play with it. Pressing the power button in X gets you a shutdown menu, while pressing it from the console puts the Zipit into suspend mode.
Dillo

Without further adieu from me to you, Das U-Boot for the Z2! Z2 U-Boot

For the most part U-Boot works and can be flashed without much worry, unlike in the recent past. SDHC is now supported. There's still issues when trying to flash from a stock Zipit to U-Boot, so this guide is for a Zipit that has already been flashed to run the 2.6.29 kernel (ie you're already running z2buntu, rootnexus, sidetrack, debian, etc).

The z2buntu rootfs contains working compiling tools, but the Zipit doesn't really have the processing power to compile programs in a reasonable amount of time. This is a good use for QEMU. QEMU can run the z2buntu rootfs as a virtual machine faster than the Zipit can run natively. I run Ubuntu Linux on my home desktop so this guide needs to be tweaked for whatever OS you run.

First you need a rootfs. you can download my z2buntu rootfs or create your own using this guide (make sure to use the jaunty distro). If you use the z2buntu rootfs, I would recommend increasing the size of the partition so that you have enough room to install the required packages and source codes you'll be compiling. To do this, write the image to an SD card (change the img filename and the device to suit your needs):

Here's a video of what I've been working on. This zipit is ubooted running the 2.6.35-rc1 kernel, has been hardware modded for USB host, and is running a tweaked version of z2buntu. The new menu program I'm using is lxlauncher with keyboard support enabled and works extremely well.