OK, here's what to do. Change the top part of the lighttpd.conf file to:
server.modules = ( "mod_cgi", "mod_accesslog", "mod_alias" )
server.document-root = "/mnt/usb/lighty/html"
server.errorlog = "/tmp/logs/lighttpd.error.log"
accesslog.filename = "/tmp/logs/lighttpd.access.log"
index-file.names = ( "index.php", "index.html", "index.htm", "default.htm" )
cgi.assign = ( ".sh" => "/bin/sh" )
alias.url = ( "/cgi-bin/" => "/mnt/usb/lighty/cgi-bin/" )
Note the addition of the mod_alias module in the server.modules line, the change to the cgi.assign line, and the addition of the alias.url line.
You can add additional cgi bindings in the cgi.assign line, ie ".pl" => "/usr/bin/perl" or whatever.
A simple example: in file /mnt/usb/lighty/cgi-bin/chumbyps.sh, put:
#!/bin/sh
echo Content-type: text/html
echo
echo "<html><head><title>ps</title></head>"
echo "<body><pre>"
ps
echo "</pre></body>"
echo "</html>"
This can be accessed with http://the.ip.of.chumby/cgi-bin/chumbyps.sh