su works for me, and i format everything but /nand and /sdcard when i install. make sure you didn't accidentally deny su access for something in the SuperUser app. busybox is already installed (in fact, a lot of /system/bin is just symlinks to busybox).
i haven't messed with the mdpi icons yet... too busy trying to get other stuff done.. and isn't 160 a bit small for a device this large?? (screenshot of this density, pls)