I was working on a similar project a while back- An Amiga-on-a-stick, using BartPE. It works. Pretty well, actually. I replaced the boot screens, set it to boot straight into a Winuae profile, etc. I keep planning on putting a guide together, but have never got around to it. And distribution of the actual final product might bring the wrath of Microsoft.
As much as I love the idea behind AROS, driver support will probably never be that great. (Something like "Driverloader" or "ndiswrapper" from Linux would be a gamechanger.) As such, it's not really an option for me.
A slightly modified Linux would be perfect. (KX Light with Amiga Forever is too stripped down.) No worries about copyright infringement, acceptable driver support, and the ability to run on slightly older machines make it the best solution, IMHO.