The way I understand it, SCO owns some of the rights to one of the
earlier trunks of the UNIX source tree.  They are claiming that IBM took
code from a cooperative project they worked on with SCO and put that
code into Linux.  They are claiming that this is how Linux has managed
to gain so much enterprise functionality so fast.  Basically, they are
trying to assert ownership rights over some of the code that may be in
the Linux kernel.  Thus far, they have not told many folks what code is
infringing on their rights.  Once they do, I would expect that code to
be removed and rewritten in record time.  For most end users and
companies, this suit is highly unlikely to change anything.  You don't
owe SCO anything until the case is played out in court (which may take
years, if SCO lasts that long) and it is decided that they actually have
some ownership rights to enforce.  I wouldn't worry too much about this
suit.  It will resolve itself however it does and life will go on.  Some
good things may actually come of it.  At this point, IBM has issued a
countersuit and as part of that suit may be defending the GPL in court. 
This could be a very good thing.  If the GPL gets its day in court and
is upheld, it becomes much stronger.  It is also possible that more
thorough documentation of the innovation in the Linux kernel will come
as a result of this suit.  That's all I know on this front.
Google for the suit and you'll probably find more detailed explanations
from folks with law degrees and such.
Hope this helped a little.
If anyone has any corrections or additional info to add, please do so.
Thanks.
Rob