I downloaded these files:
http://cumulus.gumstix.org/images/angstrom/factory/overo-201010200957/
 
rename it to MLO, u-boot.bin and uImage.
$su
....
cp MLO /media/LABEL1 (FAT)
sync
cp u-boot.bin /media/LABEL1
sync
cp uImage /media/LABEL1
sync
tar xvaf rootfs-booted-overo-201010200957.tar.bz2 -C /media/LABEL2 (ext3)
 
Messages during the boot:

Texas Instruments X-Loader 1.4.4ss (Mar 25 2011 - 15:35:41)
OMAP3503-GP ES3.1
Board revision: 2
Reading boot sector
Loading u-boot.bin from mmc

U-Boot 2010.09 (Oct 20 2010 - 10:11:49)
OMAP3503-GP ES3.1, CPU-OPP2, L3-165MHz, Max CPU Clock 600 mHz
Gumstix Overo board + LPDDR/NAND
I2C:   ready
DRAM:  512 MiB
NAND:  512 MiB
In:    serial
Out:   serial
Err:   serial
Board revision: 2
Direct connection on mmc2
No EEPROM on expansion board
Die ID #3ffa00040000000004037d071000a009
Net:   No ethernet found.
Hit any key to stop autoboot:  5  4  3  2  1  0
I2C read: I/O error
I2C read: I/O error
mmc1 is available
reading boot.scr
** Unable to read "boot.scr" from mmc 0:1 **
reading uImage
3160132 bytes read
Booting from mmc ...
## Booting kernel from Legacy Image at 82000000 ...
   Image Name:   Angstrom/2.6.34/overo
   Image Type:   ARM Linux Kernel Image (uncompressed)
   Data Size:    3160068 Bytes = 3 MiB
   Load Address: 80008000
   Entry Point:  80008000
   Verifying Checksum ... OK
   Loading Kernel Image ... OK
OK
Starting kernel ...
Uncompressing Linux... done, booting the kernel.
Linux version 2.6.34 (steve@www.sakoman.com) (gcc version 4.3.3 (GCC) ) #1 Wed Oct 20 10:22:48 PDT 2010
CPU: ARMv7 Processor [411fc083] revision 3 (ARMv7), cr=10c53c7f
CPU: VIPT nonaliasing data cache, VIPT nonaliasing instruction cache
Machine: Gumstix Overo
Memory policy: ECC disabled, Data cache writeback
OMAP3525 ES3.1 (l2cache iva neon isp )
SRAM: Mapped pa 0x40200000 to va 0xfe400000 size: 0x100000
Reserving 12582912 bytes SDRAM for VRAM
Built 1 zonelists in Zone order, mobility grouping on.  Total pages: 130048
Kernel command line: console=ttyS2,115200n8 mpurate=500 vram=12M omapfb.mode=dvi:1024x768MR-16@60 omapfb.debug=y omapdss.def_disp=lcd35 root=/dev/mmcblk0p2 rw rootfstype=ext3 rootwait
PID hash table entries: 2048 (order: 1, 8192 bytes)
Dentry cache hash table entries: 65536 (order: 6, 262144 bytes)
Inode-cache hash table entries: 32768 (order: 5, 131072 bytes)
Memory: 256MB 256MB = 512MB total
Memory: 500816k/500816k available, 23472k reserved, 0K highmem
Virtual kernel memory layout:
    vector  : 0xffff0000 - 0xffff1000   (   4 kB)
    fixmap  : 0xfff00000 - 0xfffe0000   ( 896 kB)
    DMA     : 0xffc00000 - 0xffe00000   (   2 MB)
    vmalloc : 0xe0800000 - 0xf8000000   ( 376 MB)
    lowmem  : 0xc0000000 - 0xe0000000   ( 512 MB)
    modules : 0xbf000000 - 0xc0000000   (  16 MB)
      .init : 0xc0008000 - 0xc00f2000   ( 936 kB)
      .text : 0xc00f2000 - 0xc05f6000   (5136 kB)
      .data : 0xc061a000 - 0xc0659400   ( 253 kB)
Hierarchical RCU implementation.
NR_IRQS:402
Clocking rate (Crystal/Core/MPU): 26.0/332/500 MHz
Reprogramming SDRC clock to 332000000 Hz
GPMC revision 5.0
IRQ: Found an INTC at 0xfa200000 (revision 4.0) with 96 interrupts
Total of 96 interrupts on 1 active controller
OMAP GPIO hardware version 2.5
OMAP clockevent source: GPTIMER1 at 32768 Hz
Console: colour dummy device 80x30
Calibrating delay loop... 499.92 BogoMIPS (lpj=1949696)
Mount-cache hash table entries: 512
CPU: Testing write buffer coherency: ok
devtmpfs: initialized
regulator: core version 0.5
NET: Registered protocol family 16
Found NAND on CS0
hw perfevents: enabled with ARMv7 Cortex-A8 PMU driver, 5 counters available
Switched to new clocking rate (Crystal/Core/MPU): 26.0/500/332 MHz
OMAP DMA hardware revision 4.0
bio: create slab <bio-0> at 0
SCSI subsystem initialized
usbcore: registered new interface driver usbfs
usbcore: registered new interface driver hub
usbcore: registered new device driver usb
i2c_omap i2c_omap.1: bus 1 rev3.12 at 2600 kHz
twl4030: PIH (irq 7) chaining IRQs 368..375
twl4030: power (irq 373) chaining IRQs 376..383
twl4030: gpio (irq 368) chaining IRQs 384..401
regulator: VUSB1V5: 1500 mV normal standby
regulator: VUSB1V8: 1800 mV normal standby
regulator: VUSB3V1: 3100 mV normal standby
twl4030_usb twl4030_usb: Initialized TWL4030 USB module
regulator: VMMC1: 1850 <--> 3150 mV at 3000 mV normal standby
regulator: VDAC: 1800 mV normal standby
regulator: VDVI: 1800 mV normal standby
i2c_omap i2c_omap.3: bus 3 rev3.12 at 400 kHz
Advanced Linux Sound Architecture Driver Version 1.0.22.1.
Bluetooth: Core ver 2.15
NET: Registered protocol family 31
Bluetooth: HCI device and connection manager initialized
Bluetooth: HCI socket layer initialized
cfg80211: Calling CRDA to update world regulatory domain
Switching to clocksource 32k_counter
musb_hdrc: version 6.0, musb-dma, host, debug=0
musb_hdrc musb_hdrc: MUSB HDRC host driver
musb_hdrc musb_hdrc: new USB bus registered, assigned bus number 1
usb usb1: New USB device found, idVendor=1d6b, idProduct=0002
usb usb1: New USB device strings: Mfr=3, Product=2, SerialNumber=1
usb usb1: Product: MUSB HDRC host driver
usb usb1: Manufacturer: Linux 2.6.34 musb-hcd
usb usb1: SerialNumber: musb_hdrc
hub 1-0:1.0: USB hub found
hub 1-0:1.0: 1 port detected
musb_hdrc musb_hdrc: USB Host mode controller at fa0ab000 using DMA, IRQ 92
NET: Registered protocol family 2
IP route cache hash table entries: 4096 (order: 2, 16384 bytes)
TCP established hash table entries: 16384 (order: 5, 131072 bytes)
TCP bind hash table entries: 16384 (order: 4, 65536 bytes)
TCP: Hash tables configured (established 16384 bind 16384)
TCP reno registered
UDP hash table entries: 256 (order: 0, 4096 bytes)
UDP-Lite hash table entries: 256 (order: 0, 4096 bytes)
NET: Registered protocol family 1
RPC: Registered udp transport module.
RPC: Registered tcp transport module.
RPC: Registered tcp NFSv4.1 backchannel transport module.
VFS: Disk quotas dquot_6.5.2
Dquot-cache hash table entries: 1024 (order 0, 4096 bytes)
JFFS2 version 2.2. (NAND) (SUMMARY)  © 2001-2006 Red Hat, Inc.
msgmni has been set to 978
alg: No test for stdrng (krng)
Block layer SCSI generic (bsg) driver version 0.4 loaded (major 253)
io scheduler noop registered
io scheduler deadline registered
io scheduler cfq registered (default)
OMAP DSS rev 2.0
OMAP DISPC rev 3.0
OMAP VENC rev 2
OMAP DSI rev 1.0
Serial: 8250/16550 driver, 4 ports, IRQ sharing enabled
serial8250.0: ttyS0 at MMIO 0x4806a000 (irq = 72) is a ST16654
serial8250.1: ttyS1 at MMIO 0x4806c000 (irq = 73) is a ST16654
serial8250.2: ttyS2 at MMIO 0x49020000 (irq = 74) is a ST16654
console [ttyS2] enabled
brd: module loaded
loop: module loaded
omap2-nand driver initializing
NAND device: Manufacturer ID: 0xad, Chip ID: 0xbc (Hynix NAND 512MiB 1,8V 16-bit)
cmdlinepart partition parsing not available
Creating 5 MTD partitions on "omap2-nand.0":
0x000000000000-0x000000080000 : "xloader"
0x000000080000-0x000000240000 : "uboot"
0x000000240000-0x000000280000 : "uboot environment"
0x000000280000-0x000000680000 : "linux"
0x000000680000-0x000020000000 : "rootfs"
smsc911x: Driver version 2008-10-21.
smsc911x: Driver version 2008-10-21.
usbcore: registered new interface driver asix
usbcore: registered new interface driver cdc_ether
ehci_hcd: USB 2.0 'Enhanced' Host Controller (EHCI) Driver
ehci-omap ehci-omap.0: OMAP-EHCI Host Controller
ehci-omap ehci-omap.0: new USB bus registered, assigned bus number 2
ehci-omap ehci-omap.0: irq 77, io mem 0x48064800
ehci-omap ehci-omap.0: USB 2.0 started, EHCI 1.00
usb usb2: New USB device found, idVendor=1d6b, idProduct=0002
usb usb2: New USB device strings: Mfr=3, Product=2, SerialNumber=1
usb usb2: Product: OMAP-EHCI Host Controller
usb usb2: Manufacturer: Linux 2.6.34 ehci_hcd
usb usb2: SerialNumber: ehci-omap.0
hub 2-0:1.0: USB hub found
hub 2-0:1.0: 3 ports detected
Initializing USB Mass Storage driver...
usbcore: registered new interface driver usb-storage
USB Mass Storage support registered.
udc: OMAP UDC driver, version: 4 October 2004 (iso) (dma)
mice: PS/2 mouse device common for all mice
twl_rtc twl_rtc: rtc core: registered twl_rtc as rtc0
twl_rtc twl_rtc: Power up reset detected.
i2c /dev entries driver
OMAP Watchdog Timer Rev 0x31: initial timeout 60 sec
twl4030_wdt twl4030_wdt: Failed to register misc device
twl4030_wdt: probe of twl4030_wdt failed with error -16
Bluetooth: HCI UART driver ver 2.2
Bluetooth: HCI H4 protocol initialized
Bluetooth: HCI BCSP protocol initialized
Bluetooth: HCILL protocol initialized
usbcore: registered new interface driver usbhid
usbhid: USB HID core driver
usbcore: registered new interface driver snd-usb-audio
No device for DAI omap-mcbsp-dai-0
No device for DAI omap-mcbsp-dai-1
No device for DAI omap-mcbsp-dai-2
No device for DAI omap-mcbsp-dai-3
No device for DAI omap-mcbsp-dai-4
overo SoC init
asoc: twl4030 <-> omap-mcbsp-dai-0 mapping ok
ALSA device list:
  #0: overo (twl4030)
oprofile: using arm/armv7
TCP cubic registered
NET: Registered protocol family 17
NET: Registered protocol family 15
Bluetooth: L2CAP ver 2.14
Bluetooth: L2CAP socket layer initialized
Bluetooth: SCO (Voice Link) ver 0.6
Bluetooth: SCO socket layer initialized
Bluetooth: RFCOMM TTY layer initialized
Bluetooth: RFCOMM socket layer initialized
Bluetooth: RFCOMM ver 1.11
Bluetooth: BNEP (Ethernet Emulation) ver 1.3
Bluetooth: BNEP filters: protocol multicast
Bluetooth: HIDP (Human Interface Emulation) ver 1.2
ThumbEE CPU extension supported.
Power Management for TI OMAP3.
VFP support v0.3: implementor 41 architecture 3 part 30 variant c rev 1
fbcvt: 1024x768@60: CVT Name - .786M3-R
Console: switching to colour frame buffer device 40x30
regulator_init_complete: incomplete constraints, leaving VDAC on
twl_rtc twl_rtc: setting system clock to 2000-01-01 00:00:15 UTC (946684815)
Waiting for root device /dev/mmcblk0p2...
usb 2-2: new high speed USB device using ehci-omap and address 2
mmc0: host does not support reading read-only switch. assuming write-enable.
mmc0: new high speed SDHC card at address 1234
mmcblk0: mmc0:1234 SA04G 3.67 GiB
 mmcblk0: p1 p2
usb 2-2: New USB device found, idVendor=0409, idProduct=005a
usb 2-2: New USB device strings: Mfr=0, Product=0, SerialNumber=0
hub 2-2:1.0: USB hub found
hub 2-2:1.0: 4 ports detected
kjournald starting.  Commit interval 5 seconds
EXT3-fs (mmcblk0p2): using internal journal
EXT3-fs (mmcblk0p2): mounted filesystem with writeback data mode
VFS: Mounted root (ext3 filesystem) on device 179:2.
devtmpfs: mounted
Freeing init memory: 936K
INIT: version 2.86 booting
usb 2-2.1: new low speed USB device using ehci-omap and address 3
usb 2-2.1: New USB device found, idVendor=04f3, idProduct=0103
usb 2-2.1: New USB device strings: Mfr=0, Product=0, SerialNumber=0
input: HID 04f3:0103 as /devices/platform/ehci-omap.0/usb2/2-2/2-2.1/2-2.1:1.0/input/input0
generic-usb 0003:04F3:0103.0001: input: USB HID v1.10 Keyboard [HID 04f3:0103] on usb-ehci-omap.0-2.1/input0
input: HID 04f3:0103 as /devices/platform/ehci-omap.0/usb2/2-2/2-2.1/2-2.1:1.1/input/input1
generic-usb 0003:04F3:0103.0002: input: USB HID v1.10 Device [HID 04f3:0103] on usb-ehci-omap.0-2.1/input1
usb 2-2.2: new full speed USB device using ehci-omap and address 4
usb 2-2.2: New USB device found, idVendor=0471, idProduct=0206
usb 2-2.2: New USB device strings: Mfr=1, Product=2, SerialNumber=3
usb 2-2.2: Product: Vector USB Interface:t1
usb 2-2.2: Manufacturer: Vector Tecnologia
usb 2-2.2: SerialNumber: F53D8A462F002200
input: Vector Tecnologia Vector USB Interface:t1 as /devices/platform/ehci-omap.0/usb2/2-2/2-2.2/2-2.2:1.0/input/input2
generic-usb 0003:0471:0206.0003: input: USB HID v1.01 Keyboard [Vector Tecnologia Vector USB Interface:t1] on usb-ehci-omap.0-2.2/input0
Please wait: booting...
usb 2-2.3: new low speed USB device using ehci-omap and address 5
Starting udev
usb 2-2.3: New USB device found, idVendor=15d9, idProduct=0a4d
usb 2-2.3: New USB device strings: Mfr=0, Product=1, SerialNumber=0
usb 2-2.3: Product:  USB OPTICAL MOUSE
input:  USB OPTICAL MOUSE as /devices/platform/ehci-omap.0/usb2/2-2/2-2.3/2-2.3:1.0/input/input3
generic-usb 0003:15D9:0A4D.0004: input: USB HID v1.11 Mouse [ USB OPTICAL MOUSE] on usb-ehci-omap.0-2.3/input0
usbcore: registered new interface driver usbserial
USB Serial support registered for generic
usbcore: registered new interface driver usbserial_generic
usbserial: USB Serial Driver core
ads7846 spi1.0: touchscreen, irq 274
ads7846 spi1.0: no device detected, test read result was 0x00000000
USB Serial support registered for GSM modem (1-port)
usbcore: registered new interface driver option
option: v0.7.2:USB Driver for GSM modems
Remounting root file system...
Caching udev devnodes
Populating dev cache
NET: Registered protocol family 10
ALSA: Restoring mixer settings...
Configuring network interfaces... done.
Starting portmap daemon: portmap.
net.ipv4.conf.default.rp_filter = 1
net.ipv4.conf.all.rp_filter = 1
Wed Oct 20 11:32:00 BST 2010
Turning echo off on /dev/ttyS1
INIT: Entering runlevel: 5
Starting system message bus: dbus.
Starting Hardware abstraction layer hald
run-parts: /etc/dbus-1/event.d/20hal exited with return code 1
Starting syslog-ng:.
Starting OpenBSD Secure Shell server: sshd
done.
Starting advanced power management daemon: No APM support in kernel
(failed.)
Starting ntpd: done
Starting syslogd/klogd: done
 * Starting Avahi mDNS/DNS-SD Daemon: avahi-daemon  [fail]
Starting Bluetooth subsystem:
Initialization timed out.
Starting Network connection manager daemon: NetworkManager.
No SGX hardware, not starting PVR
Starting GPE display manager: gpe-dm
.-------.                                          
|       |                  .-.                     
|   |   |-----.-----.-----.| |   .----..-----.-----.
|       |     | __  |  ---'| '--.|  .-'|     |     |
|   |   |  |  |     |---  ||  --'|  |  |  '  | | | |
'---'---'--'--'--.  |-----''----''--'  '-----'-'-'-'
                -'  |
                '---'
The Angstrom Distribution overo ttyS2
Angstrom 2010.7-test-20100909 overo ttyS2
overo login:
 
The following error does not occur when the boot is done via Flash:
Starting syslogd/klogd: done
 * Starting Avahi mDNS/DNS-SD Daemon: avahi-daemon  [fail]
 
From there the usb mouse stops working, what can I be doing wrong?