For the latest news on this continuing drama, check out these two press releases:
The first is a press release by Red Hat in which they state that they have sued SCO to prove that their products (and Linux/OSS in general) do not infringe upon any of SCO's copyright claims. They also announced that they have setup a community fund to defend against these accusations, called the Open Source Now Fund.
The second is a press release by SCO in response to Red Hat's suite, which basically claims that they were specifically not trying to spread FUD, and instead just wanted to educate end-users.
Now hmm..., who should I believe....