I'm sitting in the plenary at PyCon where Ivan Krstic is giving an amazing talk about the One Laptop Per Child project.
Even though the laptops run Linux, most of the "operating system", including things like the filesystem, are written in Python. In fact, the goal is to write absolutely as much as possible of the operating system in Python.
Sounds like the Cleese vision has been fulfilled in a way I never could have imagined!