did you manage to get X working correctly ?
I tried a bit around with the Kernel and 2.6.8 seems to work but the framebuffer does not work as it should... the framebuffer in 2.6.10 works but there is an errror with the PCI<->IRQ stuff i think and so the kernel wont start beacuse of problem with scsi and network...
In the linux ppc mailinglist there was a post about that problem just yesterday

I hope they will resolve that problem
I and seas have access to a quad xeon to compile the kernel so we can test new kernels quite fast
We have debian working on the powerstacks by now but only with very old kernel and no X (or wth an even older Kernel and X 3.3 or so )