Unlike desktop and server versions of Linux, embedded Linux is designed for devices with relatively limited resources, such as smaller sizes of RAM and much more limited secondary storage. Embedded Linux devices often have smaller flash memory-based secondary storage instead of a hard drive. Embedded Linux is also usually purpose-made for the required application and target hardware, and thus attempts to be the optimized form of the Linux kernel for that application. Most optimizations are done to make the OS a real-time operating system.

Source: Wikipedia (http://en.wikipedia.org/wiki/Embedded_linux)