The X.org foundation was created on the 22nd January, 2004 with the task of maintaining and enhancing the X Window System codebase. It includes members from organisations such as Sun Microsystems, HP, Red Hat, Novell and the Free Standards Group. It periodically releases freely available updates of X to the general public.
X.org is also the name of the X server that they release. The code itself was forked from the XFree86 X server code after XFree86 changed its license to what many distributions saw as un-free and un-acceptable. The code was forked from the most recent version of XFree86 just before the version with the changed license, version 4.4 RC2. Because many found the new XFree86 license controversial, distributions and developers quickly jumped ship to X.org development, leaving the XFree86 program with drastically less developers, and not much support. Under the X.org foundation, the X server code has seen many big improvements to the codebase, most notably changing and modularizing the build system for the X11R7 release.