Here is an interesting article on certifications. I agree that GIAC's main benefit was its practical assignment. It was probably the most difficult part of the certification, and a shame that they will be taking it out.
As far as RHCE, the article states:
... Is this certification worthwhile? For many security people looking to understand Linux better, the answer would be a resounding yes. The RHCE seems to be the last remaining cert that makes you demonstrate your skills via a practical, hands on portion. Unlike the "paper certification" syndrome as mentioned above, the practical segment of the RHCE makes it stand out for all the right reasons. A prospective employer will know that you can actually do the hands on work once you have earned this certification.
I definitely agree with this. The RHCE has a great hands-on test that requires you to fix broken systems. It requires that you know quite a bit about Linux systems in general, even if somewhat specific to Red Hat. Many times I have had to employ the same skills in the work environment.
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