The sugar demo has sevral files:

MD5(boot.tar.xz)= 28e2a494571154964d05b230595c184a boot partition
MD5(root.tar.xz)= f12ed160e64d1ff9ab82682cf771e4df root filesystem
MD5(sdcard.img.xz)= 33c5e39ca81754dfbeba6078399dbb42 full sd card image

In order to install just find the name of your SD card device (on linux its likely /dev/mmcblk0) and do xzcat sdcard.img.xz | dd bs=1M of=/dev/yoursdcarddevicenamehere 

then just put the sd card in the Efika MX and power on and you should be looking at the first time setup screen

alternatively you can partition a blank sd card into 3 partitions
1 small partition of about 40 to 100MB formatted as ext2 (I think fat32 also 
works but I havent tried it) to hold the contents of the boot.tar.xz 
file, another larger ext4 partition of about 2GB (3GB would be better) to contain the root.tar.xz archive and finally allocate the rest of the space to swap for partition 3.

the process for creating the SD card from the tar archives looks like this 
(replace the mmcblk0 with whatever your SD card device name is)

Step 1: partition the sd card.
fdisk /dev/mmcblk0 (interactively modify the pattitions and hit w when finished)

Step 2: create the filesystems.
mkfs.ext2 /dev/mmcblk0p1
mkfs.ext4 /dev/mmcblk0p2
mkswap /dev/mmcblk0p3

Step 3: Mount the root filesystem and extract the archive to it.
mount /dev/mmcblk0p2 /mnt
xzcat root.tar.xz | (cd /mnt; tar xvpf -)

Step 4: Mount the boot filesystem onto /mnt/boot and extract the boot archive.
mount /dev/mmcblk0p1 /mnt/boot
xzcat boot.tar.xz | (cd /mnt; tar xvpf -)

Step 5: unmount the volumes.
umount /mnt/boot
umount /mnt

Step 6: Finished!
Just take out the SD card and put it in your Efika and power on. 

or if you did these steps on your Efika MX like me (because my desktop does not have an SDHC reader) just reboot instead. 

Additional notes:
the file boot.scr on partition 1 is used by the uboot boot loader to figure out
that it should do something with that drive and what operations to perform. it is not a plain text file but a binary file made by the mkimage utility. the file boot.script in the boot partition is the plain text boot script. just cd to the boot directory and run ./script-prep boot.script boot.scr to update boot.scr if you find a need to edit boot.script. only do this on the SD card's boot partition unless you know what you are doing or you could make your Efika unbootable (Genesi has an SD card you can use to reinstall your Efika or get a root shell (by answering no when asked to do an install or not if you do screw up somehow)


How I made the image:
The Efika MX install SD image distributed by Genesi has a tarball inside of the home directory for the oem user. just say no to the install to get a shell or control-alt to another console and log in. and you can copy that tarball someplace.

Then you just set up the boot partition and root partition using that tarball's contents. making sure you set up fstab to mount the sd card instead of /dev/sda*
then you just update the boot.scr to make root=/dev/mmcblk0p2 and bob's your uncle.

the following script is useful for edting boot.scr

#!/bin/sh
mkimage -A arm -T script -C none -n "Efika MX Sugar boot" -d $1 $2
where $1 is the plain text boot script and $2 is the binary boot script to output.

the current standard boot script modified to boot from the SD card look like this:

setenv ramdisk uInitrd-2.6.31.14.20-efikamx.bak;
setenv kernel uImage-2.6.31.14.20-efikamx.bak;
setenv bootargs console=tty1 root=/dev/mmcblk0p2 rootwait rw quiet splash;
${loadcmd} ${ramdiskaddr} ${ramdisk};
if imi ${ramdiskaddr}; then; else
  setenv bootargs ${bootargs} noinitrd;
  setenv ramdiskaddr "";
fi;
${loadcmd} ${kerneladdr} ${kernel}
if imi ${kerneladdr}; then
  bootm ${kerneladdr} ${ramdiskaddr}
fi;

If you want the initial first time boot setup to work you need to cd to the root filesystem of the sd card and type touch var/lib/oem-config/run

I hope this helps anyone that wants to install onto an SD card although the internal 16GB flash is much faster than an SD card. you might be better off just moutning your home directory on a microSD card in the back slot instead if you need extra space. I currently use a Transcend 4GB SDHC Class 6 which seems to be fast enough.