[verizonguy]

When you flash your apache with an official release from your carrier, there are 3 files that get flashed to the phone. The radio, which is what allows you to use the device as a phone, the windows ce rom that includes the operating system from microsoft and some of the manufacturer and carrier's files for the device including device specific drivers and add-on applications not included in windows. The third file is the extended rom. This is written to a partition on the phone's memory which includes "execute-after-installation" type files that customize the device once the os has been installed.

Typically these carrier customizations include both important stuff that make things like picture messaging work, and unimportant things that the carrier may add to limit you or make you pay for something you could otherwise get for free. Often when using a kitchen to make your own rom, people opt to disable the extended rom from starting at startup automatically, and instead use this area for storage space. This is fine as long as you include the important parts of the customizations in your base rom...so yeah, in many cases you don't need to use your extended rom as it was intended, and can instead use it for storage.