I caught up with Steve (jazzed on the Parallax Forums) last weekend in person - he has been working on porting linux to the Propeller. Sounded a bit ambitious to me, but he has been working with Heater and they already have Zylin's ZPU processing core up and running on the Propeller - uclinux can be compiled for ZPU - the only thing missing is memory.
Jazzed has been working on that, too - he showed me a prototype he's been working on that expands the Propeller Platform with 32MB of sdram -