So, you will need to build your own kernel. Since they have 3.0.8 available, I would probably start with their sources. Their config file is here http://gitorious.org/archos/archos-gpl- ... nux.config You may have to tweak it a bit.
Cross compiling, I wouldn't be much help. All of my compiling is done natively.
We don't do anything with initrd as well. You could do it, but all of the necessary modules are built into our kernels.
Look around and see if you can actually access the uboot process (or whatever the bootloader is) and be able to interrupt it and configure it. You may be able to tftp your kernel in and/or load it from a SD card.