The Falcon 9 was designed from the beginning to be human-rated, meaning an increased focus on reliability. The rocket’s avionics and controls are triple-redundant (as will be some sensors in the human-rated version of the Atlas V), and the flight computers, which run on Linux, will “issue the right commands even if there’s severe damage to the system,” Musk says.
I don't really know much about OS's but I'd write control systems in a pure language compiled directly to machine code with no OS. That way you would have certain guarantees of execution and auditing the code would be significantly cheaper. I remember hearing that auditing code for satellites is outrageously expensive because most languages have side effects. So it's thousands and thousands of dollars per line of code to guarantee that it'll do what it says it will do regardless of execution path.
I'd imagine for the purposes of SpaceX though, they don't have those restrictions and so they make huge gains by using an extremely well known "off-the-shelf" OS where they can easily source programmers. The fact that the OS is (relatively) well understood would also possibly mean it's easier to test.
All of which means that for minimal trade-off in reliability, they make large gains in development time and cost.
I'd imagine that there would be some previously tested (say in aerospace) linux derivative that they'd be building off.
To be perfectly honest though, I don't know why they arn't using one of the few really good commercial hard real time unix kernels that you use for, say, UAV's and such.
Also I'm not sure they actually are using Linux to control the rockets since that would pretty much make them impossible to qualify for human space travel (i.e. DO-178B qualification).
EDIT: Looking at their jobs site it seems they are using VxWorks. This is more reasonable ...