Kept getting fs.cpio.gz not found with every install i tried, so i get a little fed up, ran the file through cpio (copy-in mode) and much to my surprise the fs.cpio.gz was instead fs.cpio.lzma. Ran a quick decompress, ran it through gzip, and threw it back into an archive with the same name as the orig file and it installed perfectly.
The new lzma compression sure will save space, but is there an update for tazpkg to actually use it yet? lol, Nice surprise though guys.

## For anyone else wanting to do the same
#mkdir tmp
#cd tmp
#cpio -id < ../$PKG_NAME.tazpkg
#lzma d fs.cpio.lzma fs.cpio
#gzip fs.cpio
#rm fs.cpio.lzma
#find . |cpio -o -H newc >../$PKG_NAME.tazpkg
#cd ..
#rm -R tmp
#tazpkg install $PKG_NAME.tazpkg --forced
##The --forced is because even though it failed before,
##it thinks it's installed, >_<<br />
I'm sorry if this has already been addressed. Oh, and if you're wondering, i just booted this across network (pxelinux), i think someone mentioned there's something wrong with the livebootable. I just mounted it and ripped the kernel and rootfs. Works like a charm except for this... Oh, and the desktop interface is beautiful. Amazing work, guys. I just wanted to let you all know, out of all of the lightweight distro's i try out for my disk-less boots, i keep coming back, because slitaz is simply amazing!