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Well, anything you load into your ROM space (ie: most OEMs) does NOT use your Program RAM space, however any cabs you install afterwards DOES take Program RAM space.
These devices have a limited ammount of space and it is devided (formated) into several drive like partitions. The ROM is one of those partitions, the more you install there, the less you have to install into other space (ram). You can only write to the ROM durring bootloader mode (flashing) so any space you do not use durring a flash is essentially wasted.
It doesn't help to install programs that get updated often into a rom because when you install an upgrade it can't delete the old files and settings the same as if the files were in the program RAM... -However you can typically install updates fine, they just install 'ghost' files on top of the ones in ROM they do however use up your program Ram and that update is typically perfectly uninstallable.
As far as having to set up yor software, you can use registry settings to more quicly set up most of your settings. It is not that simple, but if you are doing hard resets often (trying new roms etc) it will get you up and running after a hard reset much faster.
I hope this answers your questions.
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