Each variable that the user can modify to affect the rootfs size and how they all interact should be documented so that one doesn't have to find and read code to work out how to set their images size.
There is a thread on oe-core discussing this that will likely contain much of the required detail: http://lists.linuxtogo.org/pipermail/openembedded-core/2011-May/003030.html
I have added three new glossary entries to the glossary appendix: IMAGE_ROOTFS_SIZE, IMAGE_OVERHEAD_FACTOR, and IMAGE_ROOTFS_EXTRA_SPACE. The descriptions are robust enough to stand on their own and allow a user to understand how the image size is computed as well as how to request extra free disk space or increase the percentage of overhead. While these entries I feel satisfy this bug, I will later be adding in user information into the YP Development Manual that addresses image size in general. I am not tying that to this bug though. For the entries see commit ID ec6b9d77d10a95f0a2d460dca3cf8eab5dfbf0c0 at http://git.yoctoproject.org/cgit.cgi/yocto-docs/commit/?id=ec6b9d77d10a95f0a2d460dca3cf8eab5dfbf0c0