/usr/bin/vim and /usr/X11R6/bin/gvim expect to find syntax files in /usr/share/vim/syntax/. vim-common placed the files in /usr/share/vim/vim54/syntax/. This breaks .vimrc files that need to interoperate with other vim installations, including Red Hat 5.2 (vim-common-5.3-3). A temporary workaround is to set the environment variable VIM to /usr/share/vim/vim54, causing vim to ignore the builtin default value of $VIM.
Can you explain why in a .vimrc file you would need to give complete paths to syntax files? :syntax on seems to work for me with no workarounds whatsoever. I have no files in /usr/share/vim except for the vim54 directory. I don't see any bugs here.
Works for me fine with the current vim in Raw Hide.