Guys, guys... hold your horses!
1st check... does your system meet all the requirements?
2nd check... did you make dosysoverlay file in /data/local directory?
@areicko: check new update... you don't need to install additional busybox anymore.
@whitetigerdk: of course you have lost your OC kernel, because you hadn't read what's inside my update! My update flashes over stock kernel with aufs support.
@both: did you guys by any chance hook your gizmos with USB and check adb logcat? Because if you would have, you would also have seen there if the overlay was actually set or not (it would have come up in first several lines of log).