How feasible is this?

I have an Asus EeePC 2G Surf, and a standard Ubuntu/Xubuntu install won't fit onto the internal disk.

I've been wondering if I could do this:-

I install Ubuntu onto an SDHC card, and then remove a load of packages that I don't need, so that the total system fits onto the 2Gb SSD card.

Then dd /if=/dev/sdhc/card of=/dev/ssd/card to copy the system to the SSD card, and tweak GRUB so it will boot from the SSD card.

Will that work? Or am I missing something fundamental?