Okay let me give you an example.
A small PC shop starts to offer PCs with Ubuntu pre installed. Ubuntu makes the source available but that doesn't seem good enough. So the small shop has to offer the source as well?
Yes, or a written offer valid for at least 3 years to provide the source used.
They can charge for that, but not more than the actual physical distribution costs.
Let me give you an example.
I have a Kathrein Twin-DVB-S receiver.
It uses Linux, Busybox and a few other GPLed and LGPLed programs.
They don't ship it with the source and they don't host it on their site, but in order to comply with the GPL there's a written offer, valid for 3 years after the last unit sold, to provide the source on a physical medium (probably a CD).
They also state that they'll charge for the medium+time+shipping. This is in accordance with section 3b) of the GPL v2.
They must take the time to keep the latest source available? Sure nobody will probably ever ask them but they would have the legal requirement to do so.
No, not the latest source. Just the source that was used.
If I give somebody a PC with Ubuntu on it to help them out I am now distributing LINUX and must provide them with info on how I will give it to them?
Or a User group handing out Fedora CDs?
Yes, though I think section 3c) of the GPL v2 applies, which states:
Accompany it with the information you received as to the offer to distribute corresponding source code. (This alternative is allowed only for noncommercial distribution and only if you received the program in object code or executable form with such an offer, in accord with Subsection b above.)
What you see as so clear from a business point of view is full of peril.
I was thinking of offering a disk of Good FOSS to our customers free of charge but now it looks as if I would have to host source repositories to keep it legal.
No, you wouldn't have to host source repositories.
You could. But you could also just give them a piece of paper stating that you'll provide the source used for three years if requested.
Though with the cost of dvd-r's these days, I'd think that it'd be easier to just put a source directory on the dvd and put the tarballs in there.