ReactOS is a free and open-source operating system based on the Windows NT architecture, providing support for existing applications and drivers, and an alternative to the current dominant consumer and server operating systems.
Is ReactOS legal?
Yes. It's fully legal.
Developers have not looked at Windows® source code. They have used the public documentation of Windows® OSes. They have made several tests to understand how Windows® works. In fact, ReactOS does the same things Windows® does, but not exactly in the same way, because they haven't the same source code. All code in ReactOS is under the GNU GPL (General Public License).
I'm trying this in VB for fun, but since I never heard of this I'm sure it's not that amazing.
It's kind of hard to tell what will happen. On paper, there shouldn't be any reason ReactOS would be illegal; the documentation of the workings of Windows NT is not released under some \"do not replicate\" licence as far as I know, and they're not using any original source code themselves. However, it's quite possible that they could inadvertently breach some of them darn patents, and that might be a problem.
From what I understand ReactOS is a bit behind, though - last I heard they were just catching up to Windows XP or so.