This is what Java Card was developed to run on.
If you are interested in getting lower level access to your radio, you could look at the defunct http://openmoko.com/freerunner.html project or the resurrection of the Freeruner, http://www.openphoenux.org/
The talk itself was about a group that had an enormous camping trip (I hope that phrasing doesn't diminunise it) called Toorcamp of a few thousand people that thought it would be fun to also put together their own cell network for just them. They bought and programmed SIM cards and hid puzzles in the programs on them.
But the amount of programming that can be done on the SIM card alone without involving the main processor at all was really quite fascinating and there's a lot of detail in the talk if you can track it down. Here are the slides at least https://speakerdeck.com/codebutler/the-secret-life-of-sim-ca...
Also, all ATM cards which are smartcards (i.e. almost all of them in countries such as France, Norway) can also hold several applications. The banks just doesn't allow it. In theory you could, even with today's technology, buy a blank card (say, with a David Bowie picture if that's your thing) and have the bank, visa, mastercard, grocery loyalty programme, library card, frequent flyer applications etc on it. Just carry one card! But no, everyone wants to own the card have their logo in it. Sigh.
So you can "root" it and control the OS all you want, your carrier still owns you and your phone, what with (potentially) DMA level access to your CPU.
neo900 is interesting, but it is not any more open in this regard than any other handset.