"I am running Fedora Core 3 without SELinux and I am looking for a way to set the default rights for newly created home directories for new users."
"I've heard that umask may help in some way"
You need to change the default umask. In SuSE the default umask is defined in /etc/profile. I think that Fedora also uses /etc/profile for the user default umask.
Here is how umask works:
http://www.die.net/doc/linux/man/man2/umask.2.html
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Steve Stites