Sabayon Linux is a distro based on Gentoo Linux. That's not the same as basing a distro on, say, Ubuntu, because it's more than a respin. Gentoo allows you to tweak the parameters with which each software package is built and Sabayon uses this to build a distro that uses the latest bleeding edge software and tuned for performance.
All the latest goodies are in here, Compiz and KWin 3D desktop effects, the ext4 filesystem and easy encryption of your personal data. The desktop can be either KDE or GNOME, although you have to choose when you download it, there is no DVD that contains both, which is a shame as the two DVDs are less than 4GB between them so a combined one would be nice. Both versions include the XBMC home theatre system to turn your computer into an HTPC if you want.
There is now a third version available, the Gaming Edition. This is a separate DVD, twice the size of the GNOME one, stuffed full of games... who says there are no games for Linux? Sabayon is demanding in terms of the disk space it needs, and you'll need plenty of memory with a decent processor and video card to use the 3D desktop effects at their best, but if you have the hardware to run it, Sabayon is a rather nice, and increasingly popular, distro.