BIOS
The BIOS is the software that interacts with the hardware. It is supplied by the hardware (motherboard) manufacturer.
The BIOS goes with the hardware, and is the same no matter what operating system is used.
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Operating System
The operating system orchestrates the computer, managing the work the processor does and the interactions
with the display, keyboard, disc, etc.
In Windows systems, this is Windows98 or Windows XP or whatever.
In Unix systems, this is the kernel.
The operating system can be used through a shell, eg a DOS prompt. In Linux, there are several shells you can use, eg bash.
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Window Manager
The window manager provides the graphical user interface (GUI) which you see as windows on the display.
The window system was invented by Xerox and first used in the 1980s by Apple (on the Lisa and MacIntosh) and Unix (called Xwindows).
The first successful Microsoft GUI was Windows 3.1 about 1990. Since Windows 95, the Microsoft GUI has been incorporated in the operating system.
In Unix systems, there are two parts; Xwindows and a windows manager such as KDE or Gnome. There are many different window managers to choose from.
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Applications
These are the applications the users runs, such as a word processor, database programme or game.
The application needs to be built to run on the particular operating system.
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Real Life
The above description is simplistic, and intended to give an initial view.
There is lots of other software involved, eg device drivers.
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Source and Binary Code
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