On the plug itself is really the simplest way and gets you up and running in no time.
then if you do ALOT of compilation there is a great tutorial on the alarm front page, in the developers tab.
http://archlinuxarm.org/developers/distcc-cross-compilingthis is a quite involved process though so you'd need to make sure this is worth the effort (like does really take less time setting it up, then transfer the result of the compilation to the plug for tests/use than running directly on the plug).
While it was an interesting project I eventually found out that my personal use case was not worth that kind of effort.