ReactOS is an effort to create a Free Software replacement for Microsoft Windows that is compatible with existing hardware and software. Changes in this release include kernel improvements (bringing it close to XP), improved stability and hardware support, better compatibility and application support, usability improvements and a package manager.

http://www.reactos.org/en/news_page_37.html

Why would people use this instead of Windows?
Simple. It's more lightweight, but can run all their software. When ReactOS is complete, they'll be able to run up-to-date Windows apps without upgrading their hardware and paying for a new OS. It's even compatible with drivers for Windows. Once it reaches 1.0, it will be ready for home use, it will have a plethora of software and drivers, and a familiar interface.
Unfortunately this has been in development forever, development is very slow and it's very likely that once it is finished Microsoft will sue them into non-existence.
If you try it on Virtual Box, the virtual machine thinks it's Windows 2000.