Also see some quick advice here:
http://www.rjmitchell.ca/~jeff/blog2009/2010/06/02/getting-up-and-going-with-a-crosscompiler-for-pandora-arm-in-5-minutes/
And also note, you can run the toolchain on the Pandora itself (which is way awesome, but I suggest is not practical unless you have a usb/bluetooth keyboard around.) (In another thread, one of torpor's, some folks are doing i) using the Ansgtrom ipk's to install gcc into NAND, and ii) making a PND file to expose gcc etc while being on Sd.)
Another option is to install firmware to SD, and then you cna go nuts with ipk's since oyuhave nearly unlimited space:
http://www.rjmitchell.ca/~jeff/blog2009/2010/06/07/pandora-running-firmware-from-sd-card-instead-of-nand-flash/
jeff