Made some progress but still not working...
I've managed to install the OpenVPN binary to /system/bin.
Got a Motorola Milestone Tun.ko driver from, http://code.google.com/p/sbdtools/downloads/list
. It's been copied to /system/lib/modules. I've been able to enable it using the insmod command in adb shell. Verified it was running with the lsmod command.
I've moved my openvpn .ovpn config files to my SD, /sdcard/openvpn folder. Started the OpenVPN Settings app, configured the tun and path settings.
Then I started my connection and was able to obtain an IP address.
BUT... still not able to surf to Youtube or other China blocked sites.
The upload & download stats appear to be not moving, even when I try to surf to one of these websites (up: 0.02kBps - down: 0.02 kBps).
Will continue at it for some more, but if anyone is able to help, that would be much appreciated.