I think there are a few "issues" with RH7.0. They used a development version of the GNU C compiler (version 2.96), that they shouldn't have (I think) which had compatibility problems with systems running 2.95 and future versions (not out yet). It's probably been fixed now though. There was a lot of posting about it on the Linux kernel mailing list.
As for GNOME v KDE, I personally use KDE. I'm on version "post 2.1 beta 1" (updated on Saturday afternoon). I prefer the looks of KDE2 (but GNOME has better card games

), plus it's written in C++ and QT which I find quite interesting, plus it's quite a nice architecture that they are using - I'm trying to write programs in C++ and QT to contribute to KDE so I'm sort of getting to know KDE from inside as well as using it to play games, connect to the internet, etc. Give them both a try, they will happily live alongside each other. Don't compare KDE1 to GNOME or KDE2, it looks *very* dated and ugly

. The latest release version of KDE2 is 2.01, 2.1 is out within the next couple of months. Alternatively, you could be like me and download the development versions and have loads of fun trying to compile them

.