The kernel is the core operating system for Retroputer. It controls the startup and initialization of memory, trap vectors, and launches whatever code is stored at 0x02000. It also contains a lot of reusable routines that make working with the screen, the keyboard, and other devices easier.
Note
If you're at all familiar with the x86 PCs, you can think of the kernel as the BIOS (Basic Input/Output System).