About 6 months ago doing a similar thing with Fedora Core 4. Not sure if I did it the right way but what
I did was run the installation disc and selected Custom install. I then selected to do a minimal install ( good for routers etc...).
The only other thing I selected, or made sure was selected was Yum. Then I just used yum to install Xserver and KDE and a few other specific applications that I wanted. This way it would update to the latest and install all dependencies.
I think the size was around 550mb - 600mb, the only thing is I didn't finish the project, never made it around to making a iso or an installer for it. I now onto another project doing something similiar with slackware 10
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