I just read over at the Squashfs-lzma site that squashfs has been included in the 2.6.29 linux kernel. Awesome.
Morton's tree includes unionfs, but I'm still confused about whether to use aufs or unionfs.
UPDATE: I did finally figure out how to get aufs to work, not a big deal at all.
UPDATE: Squashfs 3.4 patches (seemingly) OK against 126.96.36.199 using the linux-2.6.27-rc4-next kernel patch. Thanks goes here.