1, yes
2. If you can make OZ match the deb dependencies and you get your paths setup right (maybe make /usr and /home on sd partitions?) It sounds like a great idea. If you can make it work, the OZ -server is going to be a lot fatser than XQT, I think.
basically the chroot system is easier to get going (I don't know if the OZ thing can work) and easier to manage.
You might consider using an x server (oz or pdax) and chrooting--would be snappier than xqt, I think--though you'd lose your qtopia