1) Internal SDCARD mounted to /SDCARD, External to /SDCARD2(or equivalent)
-Internal sdcard is easily accessible
-External sdcard isn't mounted to computer over usb
2) Internal SDCARD mounted to /EMMC, External to /SDCARD
-External SDCARD is default and mounted to computer over usb
-Works well for phones with small internal storage sizes
-Your internal storage is hard to access, not mounted over usb
I took this GIT commit and rolled the changes back for CM7. I then recompiled CM7 to use the option 1 mounting paradigm.
Let me know which you prefer. I personally like option 1 because it doesn't rely on having an external sdcard. Additionally the internal sdcard is not easily removable like the external, so being able to access it over usb is important. If there are reasons for options 2, let me know.
CM7RC0 with Option 1 Mounting Paradigm(Mounting over USB works): http://www.multiupload.com/NJFGUW04A2