I'm using 4 GB MMC in SD slot without any problems. Never ever had any problems at all with it, and I do copy a lot of files there all the time.
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What kernel/pdaXrom version you are using?
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I've been using a Transcend 4GB SD on my Akita since day 1. I used it on Cacko with Tetsu's kernel patch although the package manager would never want to install to it. I had to ipkg install and ipkg-link all the packages I installed, but it installed perfectly every time. I had it formatted both vfat and ext2 and different times and both worked equally well.
On Pdaxii13 I had it as a single 4GB partition and it worked seamlessly (only had it formatted ext2, not vfat). The package manager installed to it no problem. Then I re partitioned and put on two 2GB parittions, one ext2 and one vfat. Still works fine and package manager works seamlessly again.
Note: I just got my 4GB Transcend CF card and I've got it a single 4GB partition formatted ext2. No problems on Pdaxii13.