ok, you might try to use “joe”, which is a nice editor too.
ipkg install joein joe, you can just use the cursor keys to navigate and edit text.
To quit without saving just hit CTRL+C
to save, you gotta hit CTRL+KX that is, hold CTRL, then hit K followed by X.
this will save and exit.
anyway, just edit your mp3_dir in the file to what suits you.
about the usb-stick:
the webinterface cant format drives smaller than 512MB, by my findings.
I had similiar problems with my usb stick. I had to partition and format it manually, thus also maxing out the space on the /data partition.
Just create 3 partitions, whereby the first one, which will be mounted as conf/ should be like 30MB, the second one the rest, but a small tiny swap partition, like 1-2MB. donno how small this can get.
Theres a howto on the nslu2-linux page here:
http://www.nslu2-linux.org/wiki/HowTo/UseAMemoryStickAsMainDrive
I followed that, but the minimum size for an ext3 system should be taken care of for the conf/ partition. it mounted just fine after that.
hope that helps.