I ordered EBVBeagle, which is Beagleboard with out-of-the-box functionality. It comes with a SD card that has Angstrom distribution in it.
I had no previous experience of embedding Linux and I was very unsure of how things worked. But finally I got it booting and got display working. But things still did not work very well. The problem was that I was not able to login graphically. X died every time after login screen. I decided to try with a newer version of Angstrom. But how?
Making it running
Luckily there is http://elinux.org/BeagleBoard.
So, I followed loo-oong directions in http://elinux.org/BeagleBoard and I managed to get the new Angstrom demo image running. It booted and I could use BeagleBoard through serial connection but now I lost mouse and keyboard. Next I tried Ubuntu's arm version (http://elinux.org/BeagleBoardUbuntu). I got it running but again, no mouse or keyboard.
I thought that maybe I'm just not geeky enough and maybe I should leave these to real geeks :(
But I don't like the idea of giving up, so I tried one more thing: I updated the U-boot. The update process seemed to be a little bit scary operation since it means changing the content of board's flash memory. But that solved the problem, I have now mouse and keyboard in XFCE Ubuntu BeagleBoard box.
So why did I have to update the U-Boot? Because:
The kernel your running (2.6.29 series) is expecting the usb pins to be setup in U-boot..
Directions for updating the U-Boot: