I don't know what we are currently doing to get the installer iso image sized down, but I caught some discussion yesterday on irc, that the image is actually very well compressible, and checking the sizes it really is.
Might that be possible to do something like compressing the root filesystem image on the iso image, and decompress it from initrd before mounting?
Or do we already do that?
It might worth consideration, if that makes the image fit onto a CD.