1. No. Memory is SDRAM, SD cards are NAND Flash. Flash memory is much too slow to act as RAM--mainly due to its very slow write speed. Readyboost in Vista uses NAND to supplement the hard drive, not memory. Because while NAND is much slower than SDRAM, it is much faster (to read, anyway) than a Hard Disk, so the OS loads frequently needed files/data on the flash drive for very quick access. But the PPC uses NAND flash for storage already, so an SD card isn't going to help.
2. Search google for PocketCM--I believe that will give you exactly what you're looking for.
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