This isn´t a real OS! It is just running virtually in a browser window.
The Silverlight-plugin is providing the background for this "OS" in the browser.
Silverlight is a try of Microsoft to attack Adobe Flash and it is based upon the .NET platform.
Microsoft tries together with Novell to get Silverlight onto the Linux maschines.
Siverlight for Linux is named Mono.
What is Silverlight: http://en.wikipedia.org/wiki/Microsoft_Silverlight
Mono is critical for a free Desktop: http://boycottnovell.com/2008/03/24/mono-danger-to-linux/
Across the Internet you will find much more critical announcements about Mono.