Damn Small Solaris
A Sun engineer was able to build a Solaris Operating Environment which is only 60 MB (30 MB compressed image) and runs completely in RAM. For example to use it in an poor man´s thumper.
Okay, this alone makes no embedded applicance, but now take into consideration that there is an ongoing port to the Power-Architecture in progress. And take into consideration that Sun gives you an GPLed processor design to use for free. Imagine a file server applicance with a single core UltraSPARC T1. Or a home router with a single core T1 without cache and only one memory controller. Or a really kickass webserver applicance with a fully blown T1. The possiblilties are vast and endless. You only have to see and take them.