Now, this is one cool project (and video) from Alan Carvalho de Assis (and friends), as announced on the LinuxBIOS mailing list: LinuxBIOS with X Server Inside (YouTube video).
The setup: LinuxBIOS + a Linux kernel + BusyBox + a tiny X11 server (Kdrive) + the Matchbox window manager + rxvt.
All of this in a normal BIOS chip (2 MB), without any hard drive connected (who needs hard drives when you can fit everything in the BIOS just fine)...
The thing boots into BusyBox in less than 6 seconds, then in ca. 2 seconds into X11 + rxvt. There's probably even room for improvement there...
Read the full article and watch the videos here www.hermann-uwe.de