When you look at Windows XP Home and Professional Editions head-to-head, the following appear to be the primary differences (outside of cost considerations):
All of these features are supported by Windows XP Professional and none of them is supported by Windows XP Home Edition.
Remote Desktop
Offline Files and Folders
Encrypting File System
Granular Access Control
Ability to join a Windows NT or Windows 2000 domain
Support for Group Policy and Roaming Profiles
Software Installation and Maintenance
Installation using Remote Installation Services (RIS)
Multi-language support
Multiprocessor support
Multiple Monitors support
Backup and dynamic disks
Upgrade from Windows NT/Windows 2000
Advanced networking support
Remote Desktop allows you to make your desktop computer a Terminal Server. This is very handy if you move from computer to computer and occasionally need to access your primary desktop from another machine. Remote Desktop is also nice when you're on the road, as you can connect to your machine over a VPN connection from a remote location.
Offline files and folders allow you to store the contents of a network share on the local disk. This feature isn't much use for permanently connected desktops, but its great if you travel with a laptop. When you plug the laptop back into the network, the files changed on the laptop are automatically synchronized so that the files in the network share are up to date.
The Encrypting Files System (EFS) allows you to encrypt files so that unauthorized users cannot view their contents. This is helpful in a high security or a laptop environment. EFS depends on the NTFS file system. Both Windows XP Home and Professional support the NTFS file system, but EFS is disabled on XP Home. EFS is best used on laptop computers. If you don't use XP on laptops, you might not consider this a must-have feature.
The NTFS file system allows you to assign specific permissions on files and folders. Windows XP Professional allows you to assign the full range of NTFS permissions to files and folders. Windows XP Home allows you to assign NTFS permissions to files and folders, but the range of permissions is limited. Instead of granular NTFS based access controls, Windows XP Home implements something called "Simple File Sharing". The Simple File Sharing scheme allows you to assign files and folders a predefined level of access. The predefined levels are defined in this Knowledge Base article:
http://www.winxpnews.com/rd/rd.cfm?id=011121ED-AccessLevel
XP Home computers cannot join Windows NT/2000 domains. Windows NT or 2000 domain features such as Group Policy, Software Installation and Maintenance and roaming profiles are not available for XP Home computers. The Remote Installation Service (RIS) allows you to install Windows 2000 or Windows XP Professional over the network on a machine with no operating system. RIS depends on an Active Directory domain. If your shop doesn't use the domain model, then XP Home might fill the bill.
Multi-language support allows you to change the language used is various dialog boxes and applications "on the fly". This is a helpful feature is multinational corporations, but is probably not something you require if you work in one language exclusively.
Multiprocessor and multiple monitor hard support in Windows XP Professional allows you use up to two processors and 10 monitors. XP Home allows only a single processor and monitor.
The updated Windows NT backup program is included with XP Professional and XP Home. This backup program is a major update to the old ntbackup utility. The new backup program allows you to back up to virtually any media, such as local and remote disks, tape, floppy or CD-R.
Dynamic Disks allow you to create advanced Windows XP volumes, such as spanned or striped volumes. Windows XP Home does not support Dynamic Disks and therefore you are limited to only simple volumes. Spanned volumes allow you to extend the size of partitions (called volumes on Dynamic Disks) while striped volumes provide an extra measure of disk performance. Neither XP Professional nor Home supports fault tolerant volumes (such as software-based RAID 5).
If you are already running Windows NT or Windows 2000, your only upgrade option is to XP Professional. You will not be able to upgrade to XP Home.
XP Home edition does not support advanced some networking features. Networking components not supported by XP Home include IPSec, Client Services for NetWare (CSNW) and Network Monitor. IPSec encrypts data moving over the network and is important in high security and VPN environments. CSNW is only of use if you run a Novell NetWare network and Network Monitor is a TCP/IP network "sniffer" that allows you to capture packets for troubleshooting network related problems.
Looking at these features as a whole, Windows XP Home fits the needs of home users and small companies that use their computers in a non-networked or in a network workgroup environment. Windows XP Professional is the best choice for companies that use Windows NT or Windows 2000 domains, require a higher level of security, and those that have laptop users that need to secure local files and need access to network file share resources when connected and disconnected from the network.
Yes they can be networked together just don't expect the same level of file/folder security in the XP Home box.
