I'm coming at this from a Washington State point-of-view, so here is our coaches association's definition of Rec Cheer:
Washington State Rec Cheer programs must be non-school affiliated teams that are attached to a bona fide City Parks Department, Boys & Girls Club, Pop Warner program, recreational association or youth sports program. Recreational squads MUST NOT be formed solely for the purpose of competition. Rec cheer programs must include a sideline squad that cheers for an organized sport.
The purpose of recreational cheer is to provide the entire youth community a positive experience at an appropriate level. It is expected that recreational cheer programs will offer participants opportunity to have fun while increasing their physical fitness, learning new cheerleading skills, and learning teamwork, fair play, leadership, sprotsmanship, time-management skills, cooperation, trust, and regard for others.
So there you have it--lots of fun, not super competitive (although many rec cheer squads do compete), and provide a lower-cost option over all-star teams. I have a great love for rec cheer. I always wanted my program to be able to provide a quality cheerleading program at a low cost so it can be inclusive of anyone who wants an awesome cheer experience!