Yes the new Netscape is based off the Firefox codebase. As Cookie says, Netscape actually founded the Mozilla Foundation, and donated the source code for Netscape 4 I believe.
I disagree that Netscape is a bug-free Firefox though. Its based on much the same code, and indeed shares many of the security bugs that Firefox 1.0 suffered from. Firefox has been tested by a huge userbase, and Mozilla offer a great bug listing service which helps the developers immensely.
Netscape is a great alternative to Internet Explorer though, and I really hope they provide some competition to IE's dominance (remember when Netscape had about 95% of the browser market?!
)
