MS Researchers Jim Larus and Galen Hunt lead an intriguing project where they've built an OS using managed code. The project is known as Singularity. In their own words:

Singularity is a research project focused on the construction of dependable systems through innovation in the areas of systems, languages, and tools. We are building a research operating system prototype (called Singularity), extending programming languages, and developing new techniques and tools for specifying and verifying program behavior.

Besides Singularity's kernel being successfully written in C# (how cool is that!), there are all kinds of interesting lessons learned with respect to what a managed OS enables. Again, this is a prototype research OS, not a full fledged OS that can run the typical applications you've come to expect of an OS (or even provide a user interface beyond, say, that of DOS).