A coworker of mine uses a similar setup with a Debian-based chroot on his Transformer Prime Android tablet. He seems to be happy with it.

I would highly suggest to the author (or anyone else trying this) to install the Hacker's Keyboard [1]. It gives you a five row keyboard that makes living in a terminal so much easier.

1: https://play.google.com/store/apps/details?id=org.pocketwork...

I personally prefer the keyboard that comes with Terminal IDE

https://play.google.com/store/apps/details?id=com.spartacusr....

So would this mean that you can install packages with pacman?

Yep! You can install whatever you want provided it is in the ARM repos. I use vim, tmux, python, nodejs, git, etc all on mine seamlessly.

Would this enable you to have your phones IP broadcast via MDNS by installing Avahi Daemon???

I see no reason why not. Try it and let us know :-)

I've been running Debian and U untu chroots on all of my Android devices going back to the G1. It actually works very well. One key for me was making sure to bind mount the sdcard inside of the chroot environment so I have access to all of my local files. As far as X goes, I find the vnc solution works okay provided you aren't trying to watch videos but for programs like Writer and Geany, it's fine. The X server you can download from the market needs a lot of work to be useful but hopefully that'll happen.

this made me want to buy a tablet, just to try it

I'm seriously considering one as well. I was looking at the transformer pads, but I might wait for the transformer prime hd (or whatever it's called).