Since no one else has answered this.. a "distribution" is a particular entity's (RH, Mdk, Suse, Corel (well, nevermind them)) Linux "Package"... contains the kernel source and binaries, tools and daemons, X-windows stuff (usually Gnome and KDE), initialization scripts, and usually some configuration tools specifically written by the company for that distribution.
Roughly equivalent to a "Release" in your world.