It's called EyeOS, and can be found at http://www.eyeos.org/ make sure you have a fast'ish connection when you're actually testing it out.
I figure Google would do good to employ something on these lines for its own OS sometime in the future. There've been a lot of tongues wagging in regard to this. Let's see what gives. :o)
Have fun, and enjoy yourselves. :o)
//note: no comment-screening on this post.