Correct (though s/initrd/initramfs/).
Take a look at usr/Makefile for how initramfs is automatically included
in the image, right now.
The intention at the time was to quickly follow up this stub (generated
by gen_init_cpio) with a full inclusion of klibc + some basics like
nfsroot. It should be a very straightforward step to go from what we
have today to including klibc initramfs into the kernel image.
s/kernel/kernel tree/ I presume you mean...
With regards to irqbalanced, if you are thinking about including it in
initramfs, you would need to work out the details of how
userland/distros modify the default policy configurations.