If you want to boot your system off a CF disk, you need to repartition it. You will need a reasonably sized CF though (over 16MB).
First, you boot into initrds3.gz with a kernel that supports CF disks. When this has booted up, you need to execute fdisk /dev/hda. You can then repartition your system. Ideally you should make a 4-6MB Fat16 partition as /dev/hda1, and then assigning the rest for Linux (/dev/hda2). When you have done this, boot into EPOC and format the CF. Install Arlo, a kernel and an initrd in the root of this partition. Now you don't have to re-install Arlo every time you reboot.
To boot a CF based system, you need to pass the appropriate option into the kernel (see the section called Passing Additional Parameters into the Kernel), alternatively, you will need to use the rdev command to alter the flags in your homebrew kernel before you glue it.