The Zen kernel is the project that seeks to modify the Linux kernel to make it more ideal and interesting for desktop systems. The Zen kernel developers patch the mainline Linux tree with various features -- such as AuFS and the Reiser4 file-system -- not currently found in the tree of Linus Torvalds. These external patches add in new features, hardware support, and other functionality.
The project's home-page reflects Linux 2.6.36-zen1 as their latest release under the news area, and there really hasn't been any major news from the project lately... The Zen kernel Google Group discussion has also only seen two messages since November. However, upon some digging the kernel is still alive.
As far as official releases go, 2.6.36 is their last that's officially listed. However, there are snapshots (in this directory) for the 2.6.38, 2.6.39, 3.0, and 3.1 kernels. For the Git development repositories go, their Zen experimental Git repository (see here) hasn't been updated since the 2.6.35 days. However, the zen-stable Git repository is where activity is still taking place. In fact, there's a lot of activity. See the zen-stable Gitweb. Right now they are updated against the Linux 3.1.7 kernel on master. Lots of this Zen work appears to be done by Steven Barrett.
There are also various branches of zen-stable that are maintained such as for AuFS on 3.1, the CK patch-set, and also the ASPM patches by Matthew Garret that fix the notorious Linux kernel power regression.
So while the Zen Kernel may have not had any major breakthroughs lately, the project is still kicking but quiet. If you have never toyed with the Zen kernel previously, it's worth a shot for Linux enthusiasts wishing to try out experimental features.
Speaking of prominent out-of-tree Linux kernel patches, the Brain Fuck Scheduler is also still alive and well. BFS has already been updated to work against the Linux 3.2 kernel final. The patches for this Linux scheduler from Con Kolivas can be found here.