Ive heard of a dual boot where /data is partitioned off as a /system then SD becomes all /data. This only works for 2.1 though
Haven't heard of anyone doing what you mention. SD is much slower than Internal memory, no matter what class card you use and the OS uses a /cache partition so even if it was possible, I can't see why anyone would want to do it. Performance surely can only be hindered.
Further more, I cannot think of any benefit whatsoever.