Does it make sense to put your operating system on a SD card?

Actually there is another important parameter that is faster on SD than a HDD, it is called "seek time", it means the time to a information be found and read from your device.

Considering that the boot phase of a operational system reads a lot(really lot) of small files that could be spread on HDD area, SD gets it main advantage because it is based on a random-access memory(it means that you can access any region of the memmory with the same time, not as a HDD where a phisical sharp nedle must seek the disk surface for the information, spending a lot of seek time).

It would improve your OS speed in many ways(boot time for example), but keep in mind that it is still not possible to do this on Windows(it will only be available on Windows 8) you may only test and use it on Linux distributions.

Also, if you want to test reading speed or the seek time of a device(HDD or SD) I wuld recommend you to use HDTune. And if you want to use a SD card to use your OS, be aware of it's class(the higher it is, faster will be read and seek time on it)

You may also want to look at hybrid drives which have hybrid platter/SSD mechanisms, giving you much of the added speed without all the cost.

Downsides with SSD:

SSD blocks can only be written a fixed number of times, and your OS page file had a lot of writes. The SSD electronics scatter these writes to different blocks to help this a bit, but overall this needs to be thought of.

SSDs are also a lot more expensive byte for byte, relative to hard drive platters. If you can get much of the performance boost with a hybrid drive, you'll save some cash.

I had Linux running from an 8GB SD card on a GuruPlug. The GuruPlug exposes the SD card slot as a permanently connected USB mass storage device.

Worked great for about a year of near continuous uptime (the card was already a year old by then, being previously and occasionally used in a Blackberry - only interruptions were due to one extended power outage and several kernel upgrades), then the card died suddenly without warning. The GuruPlug runs hot and I'm sure that didn't help the card's longevity.

As far as the actual operation, when a lot of writing was going on to the SD card at times "disk" I/O would tend to be unresponsive.

Trying this on actual PCs with USB to SD card readers did not yield good results on some machines. I would run into the problem where suddenly the SD card would become disconnected and Linux would find its root volume and all other volumes based on partitions of that SD card unexpectedly gone. Tended to be an issue on old Dell machines but I haven't done any scientific testing to confirm for sure.