UPDATE 7.4 is out now.
(press my thanks button :D)
Do I still have to create a partition on my external drive to the USB loader read my ISO?
yes you do. and if you have any problems, make sure the partition you are going to format to WBFS is a primary partition and all others are logical partitions.
Anyone get this working as a channel?
you can have a forwarder to your sd but you cant have an embeeded channel (works without sd) because it needs a place to store covers/settings/etc.
google is your friend