I was previously using Angstrom Gnome OS given for Gumstix by Sakoman, this turned upto be a nightmare, just as you have told, with adhoc WiFi. I gave up.. I started with Linaro (Ubuntu for embedded systems by Canonical). In Linaro WiFi and bluetooth both work very well including the AdHoc mode in WiFi. In Linaro I haven't figured out how to sense ADC pins, which I was able to do using Angstrom-Gnome. So if you don't require ADC sensing for the moment, you can start with Linaro.