Despite the massively dorky cover, this is an incredible book. I was assigned this book as textbook used in Computer Science 440 at Allegheny College, and while we did not read the entire book during that class, I intend to read it cover-to-cover this summer. Tanenbaum's clever, slightly witty writing style makes "Modern Operating Systems" a surprisingly engaging read for a textbook, and he's really adept at explaining concepts in OS theory and design in a very simple way that makes them quite easy to pick up. The figures, while simple, are clear, easy to understand, and very frequent. Code snippets, written in C, are also frequent, well-commented, and easy to understand. These factors all make this book a much better operating systems text than some others I could mention.
Furthermore, although some references are a bit dated*, this book covers or at least summarizes a lot of concepts which have become big recently, such as distributed systems and cloud computing, multiprocessing and concurrency, virtualization, security and data assurance, and issues related to mobile devices -- it's not just a tour of POSIX, unlike some other texts.
Tanenbaum explains not only how modern operating systems work, but why -- the history of the machines, people, and ideas that created the OS ecosystem we see today. He's obviously an expert in his field, as evidenced by his work on Minix, and the book conveys a lot of his theories and ideas, many of which are arguably light-years ahead of those used in the operating systems we tend to actually use on a day-to-day basis. After reading his book, one tends to see a lot of room for improvement in the OSes they use.
It's really important, I think, for all programmers, not just systems programmers, to have a clear understanding of how operating systems work and how their code interacts with the OS. Even if you're a web developer, web servers and browsers have to interact with an OS at some point**. Understanding how operating systems work and how they are designed is vital to writing good, efficient, and elegant software. While I'd definitely recommend this book to computer science professors over other similar textbooks, I'd also plug it to any pretty much any developer, programmer, or computer scientist who wants to improve their understanding of operating systems.
* Which is to be expected for pretty much any computer science text...
** More frequently than you'd imagine, in fact!