Sedlec Ossuary in Kutna Hora.

Thanks Lyn! The Capuchins' Catacombs in Palermo is quite creepy:

Children are sometimes posed. Two are seated together in a small rocking chair. Rosalia Lombardo was one of the last corpses to make it to the catacombs before the local authorities discontinued the practice. Rosalia died about 1920 and is nicknamed the "Sleeping Beauty". It was said that her sister and family visited her coffin often after her death.

I love the bones, but then again I'm a little morbid. :) Look up the Palermo crypts for more creepy delights!

To Lyn: I knew that!

I think the original reason is probably a little bit more mundane:

Legend has it that in the late 13th century a handful of earth from Christ's grave was brought to Sedlec and scattered over the graveyard, thus turning it into a pilgrimage site for people from all over Central Europe. The medieval plague epidemic saw thousands of people being buried there, far too many for the graveyard to cope with.

This website has more info.

The display of human bones is meant to serve as a shocking reminder of the impermanence of the material form. If that isn't congruent with the core of Jesus' message, I don't know what is!