Technically speaking, Linux itself is not what you see on the desktop, or even what you see in a terminal window. Linux itself is the 'kernel', the core at the heart of the system that you don't interact with directly but via the layers on top. Because the layers on top are many and varied, almost noone gets just Linux, they get a so-called distribution, which contains not just the Linux kernel but also a discerning selection of the many utilities, tools, windowing systems, desktop managers and applications available.
The purpose of the distribution is to select and test combinations of these interacting parts, and assemble a working and reliable system. They generally also provide a packaging mechanism so that these parts can be easily upgraded, added or removed with a minimum of pain.
Some distributions are provided by companies who charge for this service, in particular targetting corporate customers who want to minimise risk and hassle. Others are provided by self-built communities of volunteers, who do all the packaging, testing, bug-reporting and fixing themselves and provide the distributions for free download.
As well as building reputations for high-quality products, each of the distributions also competes to produce its own identity, and a community of fanatic users. The relative merits of the various distributions is, needless to say, a topic of much and heated debate!
There are two fundamental types of Linux distribution, with quite different targets. A "live" version is extremely useful as a demonstration or introduction, because it doesn't need to be installed onto a hard drive - it runs directly from the CD! An amazing concept, everything from the boot process to the operating system and window manager and all the applications are all contained on a single CD, and all you have to do is boot it and you're away! If you reboot without the CD, you're back to your previous system, completely unaltered. The second type is a full installation, requiring an install to a hard drive for a permanent (perhaps additional) system.
The most famous live distribution, and deservedly so, is called Knoppix, and at the time of writing it is at version 3.7. It runs spectacularly well, doing a great job of self-configuration and hardware detection (at each and every boot) doing everything asked of it. It looks great and "Just Works" ™. This is the version discussed in the Trying it out section following.
Other examples of live versions of Linux include Kanotix, Ubuntu (which also has a full version) and Elive, with a selection discussed in the live distros section.
Some of the more popular distributions at the time of writing include Red Hat Fedora, Suse, Xandros, Debian, Mandriva, Ubuntu and Gentoo. As well as popularity giving an indication of quality, it also gives an indication of the availability of pre-compiled packages of additional software, which makes things much easier than compiling from source.
See the links below for detailed reviews of the pros and cons of these major distributions, suffice it to say that beginners seem to concentrate on those distributions with a reputation for ease of install, so although experienced users may rave about the benefits of Debian (stability, reliability and seamless upgrading) or Gentoo (optimised performance, complete flexibility), first-timers may prefer to look more closely at Xandros, Mandriva or Ubuntu.