Cool idea but unless you are both washing your hands and flushing a lot, not worth the effort. Here is a water conservation trick for no cost -- "when its brown, flush it down. When its yellow, let it mellow." This will cut your flushing dramatically.
If your interested in a no water toilet, you might look into the humanure system. (google it). Basically a toilet seat on top of a 5 gallon bucket with cedar saw dust in the bucket. After you do your business simply ad a layer of saw dust. Once it is full you take it to the compost pile. No water and great free fertilizer.