To create an SLS system from beginning to end, there would need to be enough harddisk space to accomodate a full Fedora Core installation, and also a minimal installation. The full installation, which does not have to be everything, will be used to create the SLS filesystem and work it onto a CD. The minimal installation will be the base from which the SLS system migrates from, with some files coming from the full Fedora. In all, 10 gig would be enough to accomodate everything.
For the target system that SLS will be running on, the requirements are fairly low. The kernel configuration can configured to run on a 386 processor. The filesystem will be around 30MB, and because it will run entirely on RAM, the computer needs to have more than 30MB of RAM. Somewhere in the range of 128MB would be enough for mostly anything.
Since SLS is made from Fedora, the Fedora Core distribution is needed. Everything needed can be found in the full installation.