If you do not use MyFaves, you can shrink it down considerably in size by removing the "stock_icons" from the assests directory inside the APK, push it to your phone via adb, just did it and it saves about 1MB, phone seem fine. So, I have a themed RC33 with my own ringtones installed on the system partition (about 3MB of them actually). and 2MB free on my /system partition. I will look for other ways to shave off the space, but if I didn't store my ringtones on the system partition I would have 5MB free space with a theme (that has not been png compressed in any way) installed.
There may be better solutions then compressing pngs to the point of possible distortion. I will continue to explore alternative options that will allow us to use the themes we want, by removing aspects of the system we don't want.
For me, I don't use myfaves (but want RC33), or the amazon mp3 store, stock email, or stock alarm clock, the last three I removed completely. But I understand removing myfaves can cause issues, so I found a way to shrink the apk to .5MB! There may be other places we can squeeze space out of the /system partition.
EDIT - Lost my contacts, trying to re-sync now... Don't try to replace apk yet, have to see if it will still sync, doesn't look promising, I may have to replace those icons with blank files. That would be the second attempt.
Alrighty, it didn't sync with no icons, it doesn't seem to want to sync with modified (all white) icons either. So, this may be a failure. Sorry if I got anyones hopes up, I will plug at it a little more before I have to head to work today. Once you push back the original apk it syncs right up.. But any modifications and no go.

I have been playing with RandumAccess' Umbrella Corporation Theme and updateing it for RC33 JF 1.41

I took the stock images in the Launcher.apk and copied the Wallpaper_grey.jpg (which is the smallest image at 15kb) to all of the other images. Then compressed the created images using Photoshop CS3 using save as web or image. This reduced the size of the images. The overall theme went from 13mg down to 9mg when I was complete.

The wallpaper gallery works, and there is still room left to work with the other images.

I finally have some screenshots of the theme, so I will be posting a new thread for the updated RC33 theme versus hijacking RA's thread (the work I did was with permission from RA also)