Patrick Volkerding has announced the release of Slackware Linux 1.0, a Linux operating system for computers coming on 24 floppy disks and featuring Linux kernel 0.99pl10 with PS/2 mouse and normal hard drive support:
"The Slackware Linux distribution (v. 1.00) is now available for anonymous FTP. This is a complete installation system designed for systems with a 3.5" boot floppy. It has been tested extensively with a 386/IDE system. The standard kernel included does not support SCSI, but if there's a great demand, I might be persuaded to compile a few custom kernels to put up for FTP."
More info here