Although I don’t work much with embedded systems these days, I’m watching Linux systems (as opposed to specialized embedded OSes) become smaller every year. The ucSimm project is very interesting in this respect: a full-blown computer with Linux and Ethernet in the shape of a SIMM board. Cool!
bertrand’s brain grep
cat /dev/brain | egrep -i ‘tech|thoughts|noise’
cat myself | sort | head -2
Bertrand Delacrétaz here - my "résumé" will tell you more.
The opinions expressed here are my own, I'm not representing any group or company on this blog. YMMV.
bertrand's brain grep 
Have a look at http://www.ibutton.com/TINI/hardware/index.html : a JVM on a SIMM !