Dunno which one is the best, but I really liked DuinOS when I played with it a while back.
It didn't quite work right out of the box and required some tweaking, but I don't remember it being difficult to use.
Paraphrased from my comments above
Depending on the flexibility available in designing the sensor modules, a common signaling / sensor approach traditionally used with long cables in industrial applications is the 4-20 mA (or 10-50 mA for longer throws or EMI-intensive environments) current loop signaling standard.
- The cable and sensor module make up a current loop, module regulating current through it
- A current of 4 mA indicates analog minimum, or digital LOW
- 20 mA indicates analog full-scale or digital HIGH
- Open circuit = 0 mA = sensor offline alarm
- Short circuit = Current limit = sensor shorted alarm
Industrial sensor modules are often designed to be powered by the same current loop, thus eliminating the need for local power supplies. This is feasible, of course, only if the sensor module does not require greater than 4 mA drive current.
Various options exist for signaling current regulation, such as using BJTs, MOSFETs or complementary TrenchFET parts.
At the data collection end, voltage generated across a shunt resistor is amplified using an op-amp, for analog sensors. Digital signals can be captured using a suitably trimmed comparator circuit designed with some hysteresis.
Depending on any lightning or other high voltage risks perceived along the transmission cables, isolation amplifiers may be recommended instead of conventional op-amps for amplifying the shunt voltage. This ensures that the data collation devices are protected from potential differences that may creep in through induction, ground potential differences, or other causes.
For example, TI's AMC1100 Fully-Differential Isolation Amplifier is designed specifically for current-shunt sensing with HV isolation.
An added advantage of using a current loop signaling approach is that security breaches to the home security system implied in the question, can be detected if any sensor is either shorted out, or disconnected.
Here is a good run-down of four different OS for the Arduino http://antipastohw.blogspot.com/2009/11/4-operating-systems-for-arduino.html