"arguments list too long" - I'm not 100% sure, but that rings a bell. I think it's caused by too long paths involved into building. Try renaming the intermediate dir I see there "Board_Support_Package_Sources_for_Intel_Quark_v0.8.0" to something short like "bsp0.8.0" or alike and ideally removing some levels of dirs, if you can.
For comparison - I have my build dir as follows and it works fine:
/home/galileo/emb_dev/bsp_src/meta-clanton_v0.8.0/yocto_build
As far as the virtualization is concerned - no worries, I've been using various types of it for quite a while, so let's see what we can do here.
First off I suspect you haven't installed so called Guest Additions (see here) - they boost performance a lot, so highly recommended for installation. And I'd recommend to install the Extensions Pack too - it doesn't affect the performance per se, but adds nice features (here's is the newest one)
Second, give the VM a second CPU, it's well worth it too. 2GB RAM is fine, as far as I can see on mine.
I'd also recommend you to decrease the default values of BB_NUMBER_THREADS and PARALLEL_MAKE variables to 6 and 6 respectively, IMHO these numbers make more sense for a dual-vCPU VM. These are located in meta-clanton_v0.8.0/yocto_build/conf/local.conf
Given the i7, you should be able to run the 64-bit guests. One thing worth checking is whether you have virtualization enabled in BIOS (may be called "VT-d" or "VT-x" or "Intel Virtualization feature", etc.). Here's the VirtualBox FAQ on the matter (search for "Does VB support 64 bit guests").
Message was edited by: Alex T: Added path to local.conf