Apologies for replying to my own post and not just editing the previous one but I wanted this standalone.. Some observations on Imagebuilder for AR71xx which may help others when searching through forums..
The Imagebuilder in Backfire 10.03 for AR71xx (OpenWrt-ImageBuilder-ar71xx-for-Linux-i686.tar.bz2 dated 03-Apr-2010 18:55 with size 340411713) is a little broken - it contains packages and kernels from 10.03-RC3 (r20653) instead of 10.03 (r20728) but it can be fixed..
Download ImageBuilder and extract..
then download the packages from the official package repository into the packages directory of the imagebuilder tree (something like rm packages/*; wget -r -nd -np -l 1 'http://downloads.openwrt.org/backfire/10.03/ar71xx/packages/' -P packages )
Copying the packages alone isn't enough though and you may experience kernel panics when some modules are loaded.. the "kernel" ipkg is actually a dummy package and the kernels are already in the Imagebuilder tree, so to update those..
Grab http://downloads.openwrt.org/backfire/10.03/ar71xx/openwrt-ar71xx-vmlinux.elf and overwrite build_dir/linux-ar71xx/vmlinux.elf
Grab http://downloads.openwrt.org/backfire/10.03/ar71xx/openwrt-ar71xx-vmlinux.gz and uncompress to build_dir/linux-ar71xx/vmlinux
You might also want to change the version in include/version.mk
It seems a little like a hack but for the last few hour it's been running as well as the previous stock tl-1043nd factory image with all my additional stuff which used to be in overlay (jffs) now happily bundled together in a single squashfs image.