When the OSHS is booted, the CHAOS creates a startup process and gives it a set of handles called special kernel right handles thus converting it to something similar to a root process ion UNIX system. It then passes control to that process and then waits for kernel calls made by that process.
The program loaded into this first process is a part of the kernel. It can do virtually anything but in real system it usually is some sort of simplistic execution server program, which launches the actual initialization program in another process and then waits for execution requests from other processes. This simplistic execution server usually knows only the OSHS native binary program and library format. The remaining file formats are loaded by another execution servers launched by the initialization program or by the users.
However there is some sort of chicken-and-egg problem: the CHAOS itself does not contain any device drivers and the device drivers themselves are stored on a disk, which is a device and thus requires a device driver in order to be accessible. This problem is solved by packing the device drivers essential for boot into an image and equippying that image with a program that uses the content of the image to construct the device driver servers for the devices which are required at boot time. The CHAOS then passes the control to this special bootstrap program, which builds the enviroment before the actual system initialization program (which is located on the disk) is executed.