For the last 6 months we have been busy with a new project: Qubes. Qubes is an open source OS based on Xen, X, and Linux, designed to provide strong isolation for desktop computing. The link to the project website is at the end of the post.
The system is currently in the alpha stage, but if you're determined it's actually usable. For example I have switched to Qubes around a month ago, and two weeks ago I even decided to wipe and reinstall my Mac Book, which used to be my primary laptop previously. Now I use my old Mac Book only for making the slides (Apple Keynote really has no competition) and Web page for Qubes :) And I use Qubes for pretty much all the other daily tasks, from work, shopping, banking, random browsing, to Qubes development itself (it takes part in the "qubes" AppVM).
Just remember to make backups regularly if you decided to use Qubes for anything else than testing and development.
So, enough of introduction, you will find lots of details (including a 40-page PDF describing the system architecture) at the Qubes project website. Enjoy!
Update 7-Apr-2010 15:56 CEST: The server seems to be overloaded a bit by the traffic... If you are planning to install the OS, I guess it would be wise to postpone downloading the installation packages until later this week, when the first wave of visitors goes away.
Update 7-Apr-2010 16:31 CEST: The Wiki doesn't work due to lack of free memory... Talking to my provider about buying some more RAM. Sorry for the inconvenience.
Update 7-Apr-2010 18:28 CEST: The server has been brought offline for RAM upgrade. Should be back online in some 15 minutes...