Linux™ is the kernel/operating system originally created by Linux Torvalds, and currently added to by a large group of individuals and corporations. Very often people refer to one of the various distributions like Debian™, Mandriva™, SuSE™ etc as Linux™, when in fact they are a combination of 3 distinct parts. Linux™, the actual kernel, GNU Utilities (these make it possible for humans and programs to work with and use the kernel), and applications from all over (The very thing that makes Linux™ fun and may kill productivity :) ). Together they make up what is known as GNU/Linux or in the vernacular, Linux™.
Linus has been reputed to have said: "I don't care how you pronounce it, I only care that you use it." Still some things need to be covered. :)
I really want to say to you "all of them". However that won't be practical, in the short term. The correct answer is to ask you, "For what purpose?". If you are installing on an embeded device, Monta Vista might be the best answer. But if you are on a 1000 system cluster I wouldn't recommend it. Generally this question will be asked by users just wanting to install it, and gain access to a stable and modern desktop system for home or personal use. For this I can only say one thing. Poll your friends, ask them what they use. Since they will most likely be the source of your help in the beginning, it's best to be in sync with them so they can answer you quickly and accurately. For your first install use what they use. Then, once you begin to feel comfortable and daring, branch out.
Another approach is to grab live CD's. Live CD's are something that is somewhat unique to the FOSS (Free Open Source Software) Since the License is so open there are a number of single CD distributions that can be run by simply burning the CD and putting it into your cdrom drive and booting. Some are super small (like Puppy Linux) and others seem to have everything (like Knoppix DVD) most are in between. The fun is, this is a way to try out lots of different ideas on what makes for a fun OS without the drudgery of installation. Just insert turn it on and play. If you mess something up, just restart the computer (even pulling the power plug won't hurt the OS). You'll be back to the beginning and able to try again in no time.
A user is either a person or a program that uses your computer. So anyone or anything, that does something on your computer is a user. Normally a newly installed system designed for use by a single human will have somewhere around 25 users. 24 programs (known as system users) and 1 human.
Users are very important in Linux and other Unix like OS's. Users are the primary way the OS controls access to sensitive or potentially harmful commands. In fact this very thing (called privilege separation) is the primary reason that Linux is not susceptible to the "virus of the day" like what you may be used to. Short of extensive social engineering type activity or out right theft of user information, Linux is pretty bullet proof. However if you use the password, r%T88(r$vG (a decent password) and then put it on a post-it note under you keyboard because it's not easy to remember. Expect to get cracked.
RTFM or "Read the Fine Manual" (the F may or may not be "Fine") is a common enough acronym, Most often proposed as the answer to your question by people who probably don't know the answer either. What this acronym originally was for was to remind people that they should read first before asking questions. In the Unix and computing world in general it's expected that one be capable of exploring and finding out some things on their own. Once you have read the fine manual 95% of questions will be answered. Do you have to read a big thick book? No. Linux documentation is not designed that way. Linux geeks don't like to sit reading a 1000 page tome just to learn how to find a file any more than you do. So linux "manuals" are really a series of pages capable for the most part of being read in under 2 minutes or less.
Now that is how you separate the geeks from the l33t. Meaning geeks will be able to direct you to the manual, l33t's won't.
The easiest way to find information is to use man. Man is a command line invoked program. The program name is a shortened from the word manual. Type man man (this gets you a manual page about how to use manual pages.) at a command line to begin. The rest I leave as an exercise for the user.
There is also help under every program in the major Window managers (like KDE or Gnome) or in nearly every program either under the help menu item, or if it's a command line program type -h or --help after the command. One or the other will invoke built in help.
Finally there is the best way to find out things. Take your error message or your question and put it into the search engines. 99.999% of the time you won't be the first to ask. Then when you go to others and ask you can show you've done your homework and that you are someone who is worth helping.
To open a man page you need only to type the command man and the name of the command you want information on. So to learn how it works lets assume you want info on man pages themselves. So at a command prompt you would type.
$ man man
(NOTE: The $ is there to represent the command prompt do not type it.) To then quit out of the man page type :q (colon q).
No you don't. In fact many people get along just fine surfing the web. Composing and reading e-mail. Doing business related tasks and more all without touching the command line. However there will come a time when you will either by curiosity or because something went sour, need to use the command line.
It's not that it's wrong to do it all from a gui, just that coding up a gui that lets you do it all (as in 100%) would result in a gui that is bloated, slow and crashes a lot. hmmmmm sounds familiar.
If however you are wanting to become a Linux admin (even if it's just for a home network) you will need the command line. It's really not that hard. Hop on over to linuxcommand.org and learn just how easy it can be. Beats staying up to 3am to watch the MSCE class on PBS.
The kind we use on Linux. Yes. There is nothing wrong with giving it away, nor is it wrong to ask the consumer to pay a fee for the cost of aggregation to build a distribution. (ala Mandriva, SuSE, Xandros etc) either by purchase of a boxed set or by purchasing access to a download. Some even have the nerve to sell T-Shirts and Penguin plushies.
Remember free from handicapping restrictions. Such as requiring a user to buy a new copy of the software when they purchase a new computer, instead of allowing them to transfer the program to the new system. So you the consumer are allowed by law because of the GPL or other OSS approved license, to modify the source code any way you need and then distribute your changes without fear of reprisal. (Beyond the occasional flame from an irate user of your change.)
It's also worth noting that the only thing that is free from monetary cost, is the source code. Compiling the code, packaging it up so it's easy to install, vetting the code. These things are what you pay for with a distribution. It's your call, down the street and over a block the hotdogs are 90 cents, here in front of you they are 99 cents. Which one is the better buy, your call either way you own the source and you can distribute it.
LUG stands for Linux Users Group. These are meetings where people from all walks of life, and with a wide variety of skills and reasons to use Linux, get together to talk about, learn about, and laugh about Linux.
Well it's not a bird fetish. The Penguin, or Tux as he is affectionately known is the registered trademark (aka mascot) of Linux. You as a user of Linux are authorized under license to use the Penguin any way you need in conjunction with the promotion, or advertising of Linux. You can also do what I do and have a Penguin plushie sitting on your monitor just to remind you of what's important. More on the history of Tux here.