Using the netboot-init in this repository, you can build ToaruOS images that download, decompress, and mount root filesystem images live.
netboot-init is a mashup of init, fetch, ungz, and mount that can replace a normal init binary in ToaruOS. Combined with a kernel, modules, and bootloader, you can build a bootable image under 2MB that downloads from a remote server before continuing the boot process. A gzipped image is downloaded and decompressed in memory, that image is then mounted, and its own /bin/init is run.
To use your own server as a netboot source, you need to change the URL from which the netboot image is downloaded and generate a ramdisk (it's the same ramdisk image used for CDs, so you can use make _cdrom/ramdisk.img.gz from a CD build environment, but be sure to clean up afterwards).
qemu-system-i386 -vga std -m 512 -cdrom http://toaruos.org/netboot.iso -M accel=kvm:tcg \
-soundhw ac97 -net user -net nic,model=rtl8139 -serial stdio
