I doubt we'd be talking about enough memory on one of these to really house an operating system.
An interesting use could be to allow software patching of processors that may have a bug or flaw. An imperfectly manufactured processor could be fixed by a software/firmware type patch, thus increasing usable production yields and decreasing prices for manufacturers.
Possibly another one (if there's much more memory and it's accessible by an end-user) could be to have a very small JIT or abstraction layer in there. That could give some interesting options. Want a specialized operation that will be executed a lot? Add it to the processor, yourself. Could be a great optimization for embedded processors, etc. novel idea.
Of course, viruses could be nasty on this sucker. One that overwrites a math operation and causes it to return a wrong value... Eeek! How much can you trust your processor?
