Getting the X-Window system installed was surprisingly easy. The kinda weird 1024x480 resolution of the screen doesn't matter since all you need to do is adjust your view port in your XF86Config file.

The Picturebook uses a Neomagic chipset, much like most of the newer Dell laptops out there. Even nicer, Neomagic has written an xserver for their chipset, available from ftp://ftp.redhat.com/pub/XFCom/.

If you don't have access to a network connection just yet, you can use the standard SVGA xserver bundled with RedHat, though I'd get the Neomagic xserver at some point anyway.

Once you've installed the Neomagic xserver, you need an XF86Config file. They're not fun to write, so why don't you just grab one from
http://www.solluna.org/~bookwyrm/pcg-c1x.html

As it turns out, the Sony C1X (an older generation of the picturebook) uses the same neomagic chipset.