I've tried 3 different sets of firmware for my M001. They are all Android v1.6. I don't think the M001 would be capable of running anything later as it doesn't really have the grunt to drive it. 

The official Eken firmware v1.7.4 is pretty good. This is the baseline for any comparison. It's much better than the v1.7.2 that comes pre-loaded. This is an unrooted system. 

Slatedroid v1.3 is also very good. This is also an unrooted system. It has a different app launcher than the base system and it's better for it. 

Ecotox v1.1.1 is much lighter than either of the other two. It's more like flashing a phone ROM...you get the android you must touch in order to set up, but you don't have access to 3G data, so you must skip the initial setup or you won't be able to configure the wifi....and therefore won't be able to get anywhere. That aside, this is probably the best ROM of the three....given that none of them is perfect. The key benefit of this ROM is the M001 is noticeably more responsive. Ecotox also gives you the choice of the default launcher, the Helix Launcher or the Home++ alternate UI. Nice. 

slatedroid.com is the place to go (as far as I know) for a community based around the device. 

The firmware updates are very easy. You unzip (with 7zip - not rar, as rar can mess up symbolic links in the zip file) the folder inside and copy the \script folder into the root of an sdcard, insert the card into the device and reboot. The firmware sees "script" and runs whatever is in there. The update takes about 2 minutes. 

You can either use full size SDHC sdcards or microSDs in a full-size SDHC adaptor.