The following kernels and distributions are what are being used:
These distributions work very well for us since updates are sent to us on CD and there's no reliance on an external network connection for updates. They also seem "cleaner" than the regular Red Hat distributions, and the setup is extremely stable.
We use Shorewall 1.3.14a (( http://www.shorewall.net) for the firewall.
We use our own software for parallelising applications but have experimented with PVM and MPI. In my view, the overhead for these pre-packaged programs is too high. I recommend writing application-specific code for the tasks you perform (that's one person's view).
Linux and most software that run on Linux are freely copiable.