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Fedora is now what was "Red Hat 9", but many enhancements later. Red Hat Enterprise Linux (RHEL) is what came out of early Red Hats and became their "Enterprise Ready" offering.
Fedora develops new stuff (e.g. Fedora Directory Service) and adopts the latest developments (e.g. KDE4) from other sources. It is leading edge and the community (i.e. us) iron out the bugs and when it is "bullet-proof" RHEL might include it in one of their subsequent releases. This isn't guaranteed, but is often the case.
So in summary, Fedora is leading edge (i.e. latest software with some bugs still to be ironed out) and RHEL is enterprise ready (i.e. secure and reliable).
Another wrinkle here. The RHEL stuff is available for free in the form of Centos. The Centos distro is virtually identical to RHEL except for the branding and support. Redhat branded graphics are replaced with Centos graphics, otherwise the software is the same stuff. There is no support from Redhat, so if you need that, buy RHEL.
There is also a lag after a RHEL release before the corresponding Centos version is available. So you will see a new feature first in Fedora, then in RHEL, then last of all in Centos.
So there you are. Choice of 2 becomes choice of (at least) 3
Most home, desktop based individuals will not want to pay for support. Often, at least I, also want new features reasonably early. So I therefore chose Fedora. If rock solid is important and you don't want to pay for support CentOS is a good alternative.
Also you will get support from the community for Fedora and Centos here on LQ or on their own forums (I guess Centos also have their own one like fedora have).
You can also choose the previous Fedora release as a compromise between solid centos and bleeding edge latest fedora (currently Fedora 9).
Of course, here where I work, we have some RHEL boxes...
On top of that (good description, by the way ), Fedora uses completely open source software, whereas RHEL may include some of RedHat's own proprietary stuff, which isn't available for Fedora.
Good, but worth mentioning that not all software Fedora uses/offers is open source or non-proprietary software - you can (and easily will) use Adobe Flash, codecs for mp3 and a bunch of other "closed" formats, and if I'm not entirely mistaken, they do offer a way of installing nVidia/ATI proprietary graphics drivers trough the package managing system too. But if you choose to, you can probably use a Fedora release that consists of open source software.
And if you do pay for RedHat, I think you can expect to get something the others (those who don't pay) won't get -- that's the idea, right?
Even though Fedora is sometimes complained to be unstable, I don't get where it comes from. As far as I've used it (and the old RedHats), it's been as stable as the other distributions too (yes, Debian included). Well, maybe Slackware hasn't played tricks on me that much, but then again, I don't use all those bells and whistles on it