I'm working on a couple ways to make OpenOffice.org smaller. It turns out that I'd left in the UNO-Python bridge, which isn't necessary, which saves some space. A couple other options, like TestTool can be removed. Also, I'm considering removing the help files from the base install and then having them be an add-in as a seperate download. Removing the help files along saves over 16MB from the final installed version.
All told, with the above changes removing some unused features (at least when portable), making help optional, and then adding in a default set of settings (to alleviate the long path issue mentioned on the product page), we'd wind up with a 120MB package. The help files would then be a 16MB addon download, if desired.
Now, those with smaller drives can't get too excited, as that 120MB app will still take up a hair over 125MB on a drive due to inefficiencies of the FAT32 format and that 128MB drive of yours is really only about 121MB. But it's a step in the right direction.