I have only once needed more memory for compilation, I think it was at some point in porting Sage (on of its very many dependencies really seemed to need lots of memory to get it compiled). Even then just adding 512MB of swap did the job.cpu speed [for compilation] + a bigger memory + and full keyboard for me is main factor to use crosscompile than dev on p1.Why? The Pandora is already powerful enough to do its own compiling, the P2 will certainly be powerful enough.Cross compiling is the way to go.
There's nothing wrong with cross-compilation of course, but there's no need to do it that way either (except the convenience of faster compilation), and it's much easier to do native compilation (especially on the P2 where tools like gcc and library include files might very well be included by default in the OS, given that storage space will be less of an issue)
CPU speed for compilation is a valid argument, but unless you're porting huge applications like LibreOffice or Sage, compile times are not a huge problem in my experience.
Full keyboard: sure, but that has nothing to do with cross-compilation. You can also ssh into your Pandora, or use a USB keyboard.
Not owning a Pandora is the only valid reason to need cross-compilation.