OK, here's the deal. RedHat started out as a great linux distro. Popular, easy to use, and yet powerful all rolled into one. For example, my favorite version was 7.3.
If you recall, RedHat 8 and 9 took a rather sharp turn. The user interface became much more user friendly, more newbie-ized, and a lot lot more like Microsoft. The RedHat corporation decided to act more like a publically traded corporation than like a group of nerds who created a *nix OS (like it initially started out). In versions 8 and 9, there was a switch over from becoming an open source linux distro for nerds to a commercialized windows alternative desktop / home pc. At the same time, the overall feel became more commercialized - i.e. you have to pay a subscription fee to access the RedHat network for *.rpm updates, etc. It lost the whole open source "feel" that other distros like Slackware and Debian still have.
RedHat thought that it would be the first to bring linux to the home pc for the average user as a windows alternative. However, they didn't count on the fact that they'd lose all of their faithful fans who have been with the distro from the beginning - for it's beginnings as a powerful open source OS.
They ended up digging themselves into a hole. So they decided to stop while they were ahead and give an end of life to all RedHat distros and not develop anymore - since the name "RedHat Linux" became associated with a commercialized Microsoft wannabe *nix version. So now they are only marketing RedHat Enterprise edition, a top of the line server platform for corporations who are willing to shell out the bucks for a *nix alternative to Windows Server 2003.
However, RedHat didn't just want to give up all the years of work they've put into their distros. So basically what they did was partner with an open source team, Fedora linux. Basically, it's a new linux distro that incorporates all the great features of RedHat (i.e. *.rpm, etc.), has the RedHat installer script (anaconda), and all the other stuff that was present back in RedHat 7.3 versions plus a bunch of the version 8 and 9 goodies also. But it's being marketed as a fully open source written by geeks for geeks linux OS ... basically to compete with the other nerdy linux distros and to get RedHat back on track. So it's basically completely endorsed and supported by RedHat with redhat features and functionality, but it can't be associated with that name because that is like associating it with the corporation - RedHat's failure in the first place. So basically they're trying again only this time making sure it's completely free, open source, in every aspect. Which is why it basically *is* RedHat, but it's not, because it's being ran like an open source group and not like a company/corporation this time around.