Well, after doing more digging, I found that in order to have a resized root partition, you need a custom firmware. Unfortunately, it seems you can only make a custom firmware using PwnageTool on a Mac.
I found 2 different custom 2.2.1 firmware image files on the web. Both images preserve the baseband version (which doesn't matter to me since I bought my iPhone with 2.2.1 pre-installed), an expanded root partition, and pre-jailbroken. The instructions given with both of these images is to launch iTunes and do a Shift-Click on the Restore button, and select the image file.
Both images give me the same result, iTunes returns a 1604 error message saying it has failed to do a restore, leaving my iPhone in recovery mode. I can do a regular restore through iTunes, and then jailbreak it the normal way with QuickPwn just fine... but that leaves me with the default root partition size.
So does anyone have a clue why iTunes is choking on these custom firmware images? Or does someone know of a different way to install a custom firmware? I really want a bigger root partition, but I'm getting a little tired of banging my head against the wall. :-(