It's a long time since I wrote much C but Linus' version seems like idiomatic C to me. The use of pointers in C is an ordinary thing and those who write a lot of C should be fluent in their use.

It's interesting to apply the same technique to other languages. I have to use VB.net most of the time so here are implementations of the tasteless and tasteful versions in VB (untested so there might be bugs). Even in VB the tasteful version is shorter and, I think, clearer.

    Module Module1

      Public Class ListEntry
        Public value As String
        Public [next] As ListEntry
      End Class

      Public Head As ListEntry

      ''' <summary>
      ''' Straight translation of Torvalds' tasteless version.
      ''' </summary>
      ''' <param name="entry"></param>
      Sub RemoveListEntry(entry As ListEntry)

        Dim prev As ListEntry = Nothing
        Dim walk = Head

        ' Walk the list
        While walk IsNot entry
          prev = walk
          walk = walk.next
        End While

        ' Remove the entry by updating the head or the previous entry.
        If prev Is Nothing Then
          Head = entry.next
        Else
          prev.next = entry.next
        End If
      End Sub

      ''' <summary>
      ''' Straight translation of Torvalds' tasteful version.
      ''' </summary>
      ''' <param name="entry"></param>
      Sub RemoveListEntry1(entry As ListEntry)

        Dim indirect = New ListEntry
        indirect.next = Head

        ' Walk the list looking for the thing that points at the thing that we
        ' want to remove.
        While indirect.next IsNot entry
          indirect = indirect.next
        End While

        ' ... and just remove it.
        indirect.next = entry.next

      End Sub

End Module