A fatwa is a judicial ruling, an opinion issued by an Islamic jurist on the application of Sharia (Islamic law). According to the article in iguana_tonante's link, it was the National Fatwa Council of Malaysia that worked out the guidelines for prayer aboard the ISS, and the article contains a link to the actual document (in .doc format). So yeah, this is a fatwa.
No question of the importance of Islamic science to our understanding of astronomy, but knowledge of how the sky looks from Earth isn't particularly helpful to a Muslim on a starship 100 light-years away from Earth.
If you're within maybe 40-50 light-years of Sol and have typical eyesight, then the Sun would be a naked-eye star, but you'd have to know which direction to look and how it would appear against the starscape. You can do that now with the Celestia simulator, so it would be easy to figure out aboard ship, and you could actually see Sol yourself once you'd found it, so it'd be easy enough to focus on it for prayer. (Of course, at that distance, Sol and Earth would be part of the same pinpoint, so as long as you're looking at Sol, you're looking at Mecca.) At a greater distance, the computer could tell you which direction to look, but you probably couldn't see it. Still, that's no different from the situation of Muslims around the world today, who know what direction Mecca is in but can't see it themselves (and strictly speaking they aren't actually facing it, due to the curvature of the Earth -- but then, it's not the literal direction that matters so much as the intent to direct one's prayers toward the Ka'aba).
Religious faith in its “pure” form – as opposed to the beliefs that the faith is applied to - is an aspect of the self, part of some people’s concept of that self and how they relate to the wider reality around them. The degree to which it’s present presumably must differ; some people raised in religious traditions will leave them, because they find they don’t really believe, and others raised without religion will find a calling there and so later join a faith. So it's clearly more than just background. And like most other personality traits, faith and the embrace of religion can be applied and utilized in different ways. If they’re used to retreat from investigation, from betterment of the self and humanity – if they’re misapplied as a means of ignoring the benefits of science, intellectual discovery, the wider possibilities of human thought – they can be harmful. But when they’re used to channel appreciation of life, of the intellect and of discovering the beauty in the universe (in creation, as many a believer would see it) it can have greatly positive effects. I’m just pointing out the obvious, of course, to say that many great thinkers use their religious faith in concert with their reason; they channel it to boost their process of self-discovery. 
