Parted Magic already does a pretty good job of this - it's a 180MB ISO that provides a graphical live-CD environment with partitioning and recovery tools (and much more). It runs completely from RAM after booting, closely tracks new releases of the kernel (and provides all of its wireless drivers, IIRC), and has a laughably small memory footprint for the features it provides. It's Slackware-based and supports third-party modules which are basically Slackware packages, so writing/packaging some distro setup scripts shouldn't be too difficult.
You won't do yourself any favours by reinventing the wheel
