The Linux kernel consists of several important parts: process management, memory management, hardware device drivers, filesystem drivers, network management, and various other bits and pieces. Figure shows some of them.
Probably the most important parts of the kernel (nothing else works without them) are memory management and process management. Memory management takes care of assigning memory areas and swap space areas to processes, parts of the kernel, and for the buffer cache. Process management creates processes, and implements multitasking by switching the active process on the processor.
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source:http://linuxpoison.blogspot.com/2008/03/135781758011024.html