OK, so you have "beta" versions of software, right? If it's Windows 7 Beta, then that means they're almost done, but they're still testing for errors, but it works good enough that you can download it... and by the way, if you encounter any bugs, then let us know so that we can fix them.
Then you have "Release to Manufacturing" (RTM), which is sometimes called the "Final" version. That's when the actually start selling Windows 7. They call it Windows 7 RTM and Windows 7 Final. That's what you can buy in the store...
But they decided to introduce another layer in the middle. Where "beta" is like "hey, check this out! Do you see any problems?"; and "final" is: "Here, buy this. We guarantee it."; Release Candidate is in the middle. It's after "beta", but before the product is finalized. It's like, "Hey, look at this. I'm gonna sell it... are there any super-terrible mistakes that I should stop the presses and make a major change?"
I dunno... That's the best I can explain it.