I came across this while testing patches of Knoppix 6.4.4 init, which is based entirely on Busybox. I run 1.17, 64-bits from Debian package. Standard losetup seems to require -r option for read-only mounting, which is necessary for (e.g.) cloop devices. But BB 1.17 does not recognize this option, making scripts incompatible. It is no big deal, but might create problems some times.
Fixed in git: commit 13e709c53f700a18a660feebdf72c613a233bf48 Author: Denys Vlasenko <vda.linux@googlemail.com> Date: Mon Sep 12 02:13:47 2011 +0200 losetup: implement -r option. Will go into 1.20.x