Basically it goes like this. Tito fought Guy Mezger in UFC 13 and lost via submission. Later, in UFC 19, Tito beat Guy Mezger in the rematch and proceeded to flip off the Lion's Den team in Mezger's corner. Ken Shamrock took offense to this and told Tito that he should learn some respect.
It went on like this for awhile, lots of name-calling, bickering like little girls, Tito won the belt and then had a fallout with Dana/UFC. Tito thought he should be getting paid more, and in the eyes of others, it seemed as if Tito thought he was a bigger deal than he really was.
While this was going on, the legend that is Shamrock was wrestling in the WWF, and later losing to Fujita because, well basically, he quit.
Tito thinks Ken is a joke, and in Ken's warped mind, he still thinks he has to prove himself to everyone and anyone.
A lot of things I'm sure happened behind the scenes and I am sure I'm leaving some things out, but eventually they fought. After more bickering and a near brawl at the UFC 40 press conference, they fought at UFC 40 Vendetta, where Tito basically beat him into a mutant looking resemblance of the guy from the Goonies.
What most people don't know, however, is that Shamrock was fighting with a torn ACL, and was unable to fully train. In their contract clause, there was a mandatory rematch stated because Shamrock and his corner figured he would lose but did not want to pull out of the fight.
Supposedly, once Shamrock was healthy, Ortiz ducked him for awhile, and thus the animosity built.
While I don't see Shamrock winning, he has looked impressive in some of his fights, and even though he quit during the Fujita fight, he actually looked really good. Sprawled effectively and aggresively, almost knocked the much larger and stronger Fujita out, and almost choked him out as well. If he can come in the fight in that fighting shape with obviously more conditioning figuring he is 100%, I really think this fight could surprise a lot of people.