The question popped up a few times in the forums, so I created a tutorial on how to do it: http://sourceforge.net/apps/trac/wdtvtools/wiki/Tutorials/CreateApplicationImage.
The assemble-app-bin.sh script that is introduced in the end is also available in the SVN repository via
# svn co https://wdtvtools.svn.sourceforge.net/svnroot/wdtvtools/trunk/appbinutils