Thank you, all - for the excellent answers.
Had found PiBangLinux few days back, but then it is a Desktop oriented distro, and I'd have to perhaps do the same kind of cleanup, as I could perform on Raspbian. Undoubtedly, PiBangLinux is very interesting, and I've been using CrunchBangLinux for almost 3years now, on a Netbook whose raw processor speed is just slightly better than RaspberryPi itself
. As far as I can tell, PiBankLinux has no other fundamental differences, as far as headless operation is concerned.
As for Archlinux, my issue with it is only the always-on-bleeding-edge thing. If I run some of my Pi's always connected to internet, and others which are not connected as often (or never), then I land up having an issue of dealing with multiple different overall versions, which is quite painful. Of course, we can always disable the autoupdate... but as you also noted (and something I didn't realize), that ArchLinux is missing lot of ARMv6 packages.
The other options like "Baked Raspberry Pi Mod" and "Raspbian Server" seem to be very interesting, and very close to what I think should serve my purpose.