"1) What is the deals with staticly linking the binaries?....Good/bad? Would They need to be linked against generic x86 libs?"
Dynamic linking uses memory much more efficiently than static linking:
When a library routine is dynamically linked then there is only one copy of that routine in memory no matter how many programs are using it simultaneously. When a library routine is statically linked then that routine can only be used by the program that it is linked to. If you have several programs using the same statically linked program at the same time then you have several copies of the program in memory at the same time.
If you are using dynamic linking then all programs in the system must be compiled against the same library versions. This is kept straight by the Linux distributors when they compile the source to put in their distribution.
If you are distributing binaries then you have to allow that the libraries on the users' systems can be any version. By statically linking the binaries to their library routines your binaries will not have to be compatible with each user's dynamic libraries. However your binaries will be memory hogs and knowledgable users will prefer to use dynamically liked programs.
"2) What are some NON stuburn programs in regards to where they are installed, which are nice to have for bootable distros easily and quickly?"
I don't understand the question.
"3) is 386 generic x86?"
Be prepared. Create a LifeBoat CD.