How close exactly is CentOS to RHEL? I noticed on their site they say they alter some packages? I've read it's the same thing with just the RH's trademark symbols removed. How true is that statement?

Are package updates made available for RHEL also released for CentOS? Do they have to be modified by CentOS developers so they will install? I ask because we are dealing with a hardware company which only officially support RH for their drivers, I'm wondering if the same rpm file made for RHEL would install on CentOS.

I work for a small company and we are currently using Fedora in house. We were considering upgrading to RHEL but prefer a free OS as we'd still be using Windows if we wanted to pay. I'm reluctant to recommend CentOS as it's not very well known and no one knows if it'll be around in a year or two. I'd be fine playing around with it on my own but for business use, would you guys recommend it? Stability and long term use are my main concerns. Thanks for any opinions.

They modify the artwork and remove Redhat branding. They also remove the screen that ask you to register your installation for Redhat updates etc.

CentOS is an Enterprise-class Linux Distribution derived from sources freely provided to the public by a prominent North American Enterprise Linux vendor. CentOS conforms fully with the upstream vendors redistribution policy and aims to be 100% binary compatible. (CentOS mainly changes packages to remove upstream vendor branding and artwork.)
CentOS-4 is a freely distributable OS built from the source at: ftp://ftp.redhat.com/pub/redhat/linu.../os/i386/SRPMS
Before building the OS, non-free packages are altered. Non-free packages would include those encumbered with a non-redistributable copyright or trademark.

I believe they also remove up2date and use yum as a substitute. Possibly some other modifications I am not aware of.

CentOS uses up2date but it connects to the CentOS servers instead of RHN. YUM is available as well, but its nice to have up2date so that you can know when updates are available.

I never had any problems installing RHEL4 packages on CentOS. As far as I know the only modifications (as others mentioned) are:

- Different artwork.
- Inclusion of YUM and some dependencies.
- Modified up2date configuration to point to the CentOS servers.

I personally prefer YUM over up2date. And Red Hat may replace up2date with YUM plus pup somewhere in the future.

Security updates and package updates are usually released very quickly after updates are made to RHEL. Of course, there is never a guarantee that this will always be the case, it is a community-driven project.

The source RPMs are just recompiled.

Please, be aware that 'free' in the Linux world is meant as in freedom. There is no such thing as a free lunch. In the end someone has to do the work, Red Hat, CentOS project members, or a system administrator. Red Hat Enterprise Linux is a service subscription. It gives companies regular security and reliability updates, as well as support. If you go for CentOS, you can get it for free as in beer. But it is supported by people who build it voluntarily. If anything goes wrong, the system administrator has to pick up the pieces in all cases.

BTW. In my opinion CentOS is great for running in enterprises. Just be aware of the trade-offs.

Considering their track record, I think they will. The have a relatively large pool of active contributors, and gained many users.

IMO you are getting to the real point here in your last statement.
For what it's worth, I have recently had to make a similar choice. While we are currently a windoz shop we do make a point of using open source when and where we can. Partly in this effort and partly for performance gains in apache over IIS we recently selected RHES for our web/app servers. (Both in house and when hosted offsite.)
Since it's my job to see that we are up and that we can remain so in the forseeable future, I selected RH. I can count on them being stable, packages being available long term, and support is available should my experience/talents be exhausted. If something goes wrong I'd prefer it be due to a limitation of mine that can be resolved by seeking reliable help elsewhere and not because I made a so so choice and saved $300 upfront on a server's OS.
Yet as I mentioned, we have less linux expertise in house then the other so I may be suggesting more caution then you personaly might need. Uptime and service is important to us so we went with a proven and supported distro. In a couple years this could be different for us but I'm happy to be where we are now.

Best of luck!