I am new to Micro-controllers and started learning AVR Micro-controllers. All I know is there are General and advanced functionality I/O pins and we need to read their respective resisters. I did a couple of projects using the same functionality. But now I come across features that an RTOS can be embedded into a Micro-controllers – now I am totally failing to understand how an OS can be embedded into a Micro-controller and how it would work with the hardware / controller? I mean where / which address OS will be loaded and how – how will it boot on power up and start the application etc?

Small schedulers for microcontrollers are supplied as source code and statically linked into the same executable as the application code that uses the RTOS. There are LOTS and LOTS of examples in the FreeRTOS download that show this, and a free book you can download: http://www.freertos.org/Documentation/161204MasteringtheFreeRTOSRealTimeKernel-AHands-OnTutorial_Guide.pdf

Thanks for the details I understand the concept – however please also let me know how they run TCP and have ports concept?

In order for this forum to be the most value to FreeRTOS users, which is its purpose, I prefer to keep the topics focused on FreeRTOS and free from general embedded system discussions. There are lots of forums on the web where general embedded systems topics can be discussed and I think you would get more satisfactory answers posting questions there. For example, if you have questions on AVR microcontrollers and how to write software for them (which if my memory serves me correctly your questions are about) I would recommend the AVRFreaks forum.