The kernel acts as an interface between applications and hardware, providing basic facilities like process management, memory management, and device management. There are different types of kernels including monolithic, microkernel, and hybrid kernels. A monolithic kernel runs all operating system services in the same process as the kernel itself. It is commonly used in Unix-like systems and can be faster due to less software, but bugs can more easily crash the entire system and it is not portable to new hardware architectures.