Yes, you can disable the onboard memory unit, there are threads about this already. More or less you just blank out the NAND after a certain address. The Cygnos Toolbox even has a function specifically for this. You can do it with whatever flashing solution you use, though.
I don't think you have read the first post:
This box is not mine so I prefer not to leave the Internal MU unformated. This will leave the trigger to corrupt the nand intact.
Replacing the larger nand by a 16mb nand is possible. To do this you have to change the resistors and the nand (use a nand chip from an old rrod xbox or a xd card). If you search you will find some topics about people that did this already. This is a lot of work however. I would just say to the guy to never ever format the memory and leave a lpt cable inside the box for easy reflashing.