It installs a complete bootstrap development system first. After telling the Lunar package manager which software will be required, it builds the entire system by downloading current source code and locally compiling an optimized system tailored toward the users specific needs. This should result in a lean and optimized operating system. On the downside, compiling a whole distribution from scratch may be time-consuming and complicate the task of keeping the packages up to date.
Lunar Linux is licensed under the GPLv2.
2011-03-25: Despite appearances, Lunar Linux is still very much alive. The official 1.6.5 ISO was released on 2010-08-22, and work on a beta release of the next ISO is currently in progress. The Forums and Wiki are inactive because they were locked after prolonged spam-bot vandalism. If you require help, simply go to the #lunar irc channel and ask!