At the most general level, Gazelle is an experiment in building an ultrasecure browser. Like Chrome, it breaks tasks up into different processes, but instead of separating at the page level, Gazelle breaks individual page elements into different processes, allowing content from different servers to be isolated and ultimately providing fine-grained security controls. To manage all these different processes, there's a central "kernel," which is where all the OS talk stems from -- it's all still running on Windows, and the rendering engine is still IE's Trident engine, but Gazelle manages all those separate processes independently, kind of like a virtualized OS. It's certainly interesting stuff, but it's still all just a research project for now -- Chrome OS is still vapor, but it's clear that Google intends to ship something, while Gazelle seems more suited to inspire future versions of IE. Still, it's interesting reading if you're into it, so hit the read link for more.
Read - Ars Technica analysis
Read - Microsoft Gazelle white paper [Warning: PDF]
[Image courtesy of Robert Scoble]