This is a bug on Fedora 9 related to the dircolors command. This command is executed by /etc/profile.d/colorls.csh and is meant to set the LS_COLORS environment variable. As a workaround you can put a custom .dir_colors file in your home directory:
cp /etc/DIR_COLORS $HOME/.dir_colors
then edit the .dir_colors file and comment out the line with CAPABILITY. See man dircolors for some details.