I wanted to run a bunch of VM's over the terminal (serial console) with minimal resource usage and decided to build a version of linux from scratch along with a build of busybox for the userland shell.
Using the tinyconfig configuration to build the linux kernel (+ additions) and the defconfig configuration to build busybox, I was able to get a minimal but functional VM running under QEMU. The kernel takes up less than 1 MB of disk space and the initramfs wrapping busybox clocks in at just ~1.5 MB.
The code and some additional documentation (in the README) is available from: https://github.com/romforth/tlb
Now I can have a boatload of VMs running - even on my old under-powered laptop.