I think you're kidding yourself with this phrase "simple OS" - an OS by its very nature isn't simple. They're pretty tricky to make, and besides, why would you bother when there are so many around already?
Try running Linux with FVWM or WindowMaker - they are both minimal desktop environments, and should suit your needs perfectly.
Windows Embedded _is_ an OS in it's own right - it's not a tool for creating new ones. I think somewhere along the line you are unaware of what an OS actually is, and how much work goes in to designing, coding, and testing one.
Rawlyn.