XOpup-1.0_RC and beyond does not require ext2/ext3 formatted media
However, to use the "save to the entire partition" option you need and ext3/ext3 formatted USB or SDcard
--------------------------------------------------------------------------------
These instructions are for Linux-newcomers with only an XO-1 and Sugar . If you know to use "fdisk" or has a linux machine with "parted" or other disk utility, don't bother.
--------------------------------------------------------------------------------
Conventions: All terminal commands are given in double quotes ( " ). Type them without the quotes.
File names or terminal text is in single quotes ( ' )  and with a fixed-size font.

Note: The instructions are for a USB stick. For an SDcard just replace "sda" with "mmcblk0" and "sda1" with "mmcblk0p1" wherever they appear in the istructions below
--------------------------------------------------------------------------------

1) Get a new USB stick at least 1GB.
(USB sticks that have been reformatted with linux utilities or worse have been "dd"-erased have performance and reliability problems. However, if you have done it before you know how to make the entire stick one linux partition :)

2) Open a terminal and type "df".
Note what devices are on.
Insert the stick and type "df" again. Your stick should be at the end of the list. If the only one, would be likely something like that :

'/dev/sda1 NN% /media/some_name_or_number'

Note the stick's name and device. From now on we will assume that the stick is in '/dev/sda1', adjust accordingly if not.

3) Now become an administrator For the XO/Sugar type "su", for other linux distros "sudo -s" and enter your password if required.

a) Unmount the stick, make its partition a linux partition, make the filesystem and give it a name.
Type:

"unmount /media/some_name_or_number"

Attention: If you are using Sugar you MUST unmount the stick from the frame.
'some_name_or_number' is the actual name you get for your stick from the "df" command above.
 
Type "df" to make sure that the stick is not mounted.

b)
Then start fdisk.
Type:

"fdisk /dev/sda"
"p"

you should see something like that:
Disk /dev/sda: 512 MB, 512753664 bytes
56 heads, 32 sectors/track, 558 cylinders
Units = cylinders of 1792 * 512 = 917504 bytes
Disk identifier: 0x146a3f97
Device     Boot     Start End    Blocks     Id System
/dev/sda1   1      559    500592     6   FAT16
Type:

"t"
"83"
"p"

now you should get something like that:
Disk /dev/sda: 512 MB,512753664 bytes
56 heads, 32 sectors/track, 558 cylinders
Units = cylinders of 1792 * 512 = 917504 bytes
Disk identifier: 0x146a3f97
Device     Boot    Start   End     Blocks     Id System
/dev/sda1           1 559     500592     83   Linux
Type:
"w"
"q"

d) you are back to prompt.
To make the ext2 file system, type:

"mke2fs -L XOpup /dev/sda1"

To make it an etx3 file system type:

"mke2fs -jL XOpup /dev/sda1"

Will take a minute or more (depending on the size of the device) on the XO-1 to create the ext2 file system.
Type:

"sync ; sync"

To make sure everything is in sync :-)
Your USB/SDcard is formatted!

4) Remove your stick and re-insert it. It will show up as '/media/XOpup' in the "df" output.
Now extract 
the files of 'XOpup-1.0_RC2.tar.gz' in the XOpup stick/card .
Type:

"cd /media/XOpup
tar xvzf /path_where_XOpup_is/
XOpup-1.0_RC2.tar.gz
sync ; sync
"

Note: It's OK if your
'XOpup-1.0_RC2.tar.gz' file is at the root of the XOpup stick. (After you format the stick, download directly there or just copy/move it over)
In this case just type:

"tar xvzf XOpup-1.0_RC2.tar.gz
sync ; sync
"


You are done !
Transfer the stick/SDcard in your XO if is not already there, power up and enjoy.