Pretty much, if you look at Lua Player [ http://www.luaplayer.org/ ] you can see some of the stuf that is possible. Not sure how feasible it be for large games/programs though.
I'm a newbie developer in GP2X (at this moment <_< ), but I have the intention to port Lua (the scripting language) to GP2X. I suposse this is the first step in order to get Luaplayer run into GP2X. Soon, more news about it.