Well thats alot of messing about/learning for the day.
With the tips about the ext2 read/write and the network/services changes I finally got it to work.
I used this (http://www.thewireframecommunity.com/node/174)for
mac and changed the file as suggested in this thread. It came up with an error on first boot and said it would boot again. Second time around it spent AGES going through downloads and text and who knows what else and finally came up with XBMC linux .. yay.
Havent tried it yet but ill take it on faith that its awesome.
Next step will be the HDD install.... tomorrow.
Hopefully Sam will be back to help for that.