You can get special Linux distributions specifically designed for embedded development from various companies.
However, the tip you are describing sounds like it's a standard x86 board. Is it Via C7, or Atom, or something like that? If so, you can make full use of Debian. With Debian, you can start with a simple, basic system and simply add the packages you need.
Even if your board is not x86, Debian supports a truly wide range of architectures; You should check and see if Debian will work for you.
I talked with someone who worked for an embedded system company, and he told me that they started with a heavyweight distribution (Red Hat may have been) and then tried to get rid of fat. He told me that it was very painful to do this, and he regretted that they had just used Debian and started with minimal Debian packages.
A web page was found here describing the minimal installation of Debian.
http://users.telenet.be/mydotcom/howto/linux/debian_minimal.htm