While Linux was booting using an NFS filesystem, this was not enough. For an actual field product, we needed Linux to boot from an independent device, without the need for a network at all. We decided to create a special kind of image, called initrd, which is basically a Linux kernel with a compressed file. The compressed file includes a Linux filesystem. The filesystem is unpacked to a ramdisk on boot, and mounted as the root filesystem.
During the boot process, the bootloader relocated the kernel image to address zero - which was fine, and the initrd part to a higher address. The area to which initrd was relocated was not mapped in our kernel's memory, and all we got was a kernel error (access to bad area). After modifying the bootloader to relocate initrd to a different address, all was fine and Linux booted succesfully.
If your board has some NVRAM memory, it would be a good idea to use it for bootloader purposes. After writing a module for our NVRAM memory (out of scope for this paper), we modified the bootloader, so that the kernel command-line, and MAC address were saved in NVRAM. When the bootloader starts, it checks NVRAM and if it is initialized (by a certain magic number), the bootloader uses the command line written there. Otherwise, the bootloader reverts to a default command line, allowing the user to edit it.