According to Steve on the Savage Taylor blog, I need to copy the minimal System 7 disk image and rename it TempDisk.img, then point Basilisk GUI toward the those two files, as well as set up a Unix Root folder, which gets shared between OS X and Basilisk. That should give me three drive icons on the Basilisk desktop - one for OS 7 drive, one for the Unix drive, and one for the Tempdisk drive. Except, with mine, Tempdisk doesn't retain it's new name - it goes back to the original name, the same as the minimal disk image of System 7.
Additionally, I placed the 19 files to install the full version of System 7.5.3 files in the Unix drive. When I tried to launch the Install smi file, Basilisk tells me the file cannot be used, and "I must copy to a Macintosh HFS or Macintosh".
So, I thought - seeing as I have a Mac OS 8.1 configuration for Basilisk which works perfectly, why can't I just use the HFV image file from that, and use DD in terminal to copy that to the SD card for SCSI2SD, instead of Steve's minimal version of System 7.1? So, I just pointed the if= part of the DD command to the HFV file from Basilisk. (along with the rest of the commands). Writing all that to the SD card went much quicker, and although the SD card failed to automatically remount as it had before, I could see all the MacOS 8.1 files under OS X. Putting the SD Card in the adapter though, and it fails to boot, just giving me the flashing question mark folder.
Dunno where I;m going wrong, and it's driving me up the wall.