Thanks for the advice, and words of warning...
I was thinking that a 1Gb card would be large enough to hold the NAND backup, ROM image, and a library of my favorite ipks. However I didn't know that a FAT16 file system was required for the flashing process - thanks for (re)stating that.
Would anyone see any harm in creating a 256Mb FAT16 partition on the card? I wouldn't think that this would be a problem, but I don't know if the flashing process is resilient enough to recognize the partition. (I'm still a flash-virgin.)
I think that I'll probably go ahead and get the SD card at this point. If the flash process doesn't recognized multi-partitioned cards, then I'll probably get a 256Mb CF just for flashing.