I have wondered how such a tiny distribution is possible. I'm thinking of the kernel, in particular--when I try to compile my own kernel with no module support and only the drivers I need built-in ("make localyesconfig" will do this), it comes out like 10MB compressed. And I am no kernel expert, so it's hard for me to tell which settings I can change and what will happen if I do.
Then when I boot the most bare-bones system with /bin/sh as init, it is using like 70mb of RAM doing nothing.
So anyway, I found that you can just grab their kernel config, I'll be curious to see how it differs from more typical configs: http://tinycorelinux.net/13.x/x86/release/src/kernel/config-...
Windows 95 ran in 8 MB of RAM. (Well, officially 4 MB for marketing purposes, but no one thought that was actually enough.) I would be really impressed to see a graphical Linux environment that could run in that amount of RAM.