Disclaimer

Principles

The target directory is likely to be a SD card. 8G recommended.
Phase 1 populates the target directory with the main ARMedslack Linux distribution.
Phase 2 populates the target directory with parts from official Open Pandora OS and tweaked stuff.
A specific part of rc.local is executed during the first boot on a Pandora.
The files folder contains tweaked stuff.
The pkg folder contains pre-built packages from a previous alpha build.
The sources folder contains sources for essential programs.
Some proprietary stuff is missing, like 3D drivers.

Get the archive here.
If you don't run a Slackware or a derivative, get the Slackware's installpkg script here.
Put it in /sbin and make it executable.

You need to download the official Open Pandora rootfs: http://openpandora.org/firmware/pandora-rootfs.tar.bz2
Uncompress it as root anywhere and link it to the build directory as "pandora-rootfs".
Format a 8G or more SD card with the Ext2 filesystem. To make explanations clear, name it SLACK.
If you don't know how to format a drive, use GParted under Linux, or run their Live-CD. Here's the manual.
It's highly recommended to have a second partition formated as a swap. 256M or more is a good choice.

Run as su -.
For this very first alpha build, don't remove the SD card now, you have to edit ie.: /media/SLACK/etc/rc.d/rc.local

Remove double-comments in order to produce the needed packages during the first boot.
Put the SD card in the Pandora, and power it on.
The Pandora will generate all (or almost all) needed packages.
The pandora will power off after having done the job. May last for one hour or two.
Remove the card.
Save /media/SLACK/tmp/*.t?z in the pkg folder of the build system.
Now, you can boot normally.