The boot loader is one of the most crucial pieces of software on your system. Without it, you wouldn't be able to bootstrap the operating system. The boot loader loads the kernel into the memory and passes the relevant arguments to it. It then jumps to the kernel's address and lets it take control.
The boot loader is usually placed in the Master Boot Record (MBR) of the boot harddrive, but may also be placed in the first sector of boot or root partition. The Master Boot Record is the first sector of a hard drive. The boot hard drive is usually the master on the primary IDE chain, but the boot loader can also be placed on a floppy. Also, a boot loader can load a second boot loader which can then load a third bootloader, etc ad naseum.
- Boot loader showdown - Getting to know LILO and GRUB (www-128.ibm.com)