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I think you're confusing two things. The Linux kernel (I think version 3.5 is latest) is the core of the operating system and controls how processes are scheduled on the CPU, the memory allocated to them and other things -- it basically runs the show.
The second version you mention is likely to be the distribution version, a wild guess you're talking about a Red Hat derived distribution. A Linux distribution contains the kernel and other programs necessary to run Linux on a machine. There are many people who package distributions and they all give each release a version number (or name sometimes) to differentiate between them.
For example the Debian team packaged kernel version 2.6.32 in their release version 6.0, codenamed Squeeze.
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