I am just wondering why you would setup a user home folder in Windows 2000 under the user properties in Active Directory other than to give them a folder to store files on other than their pc. The reason I ask is that I notice Windows creates a sub folder called Windows under this share which impacts performance of a PC if that user should travel the WAN. Any ideas?

Using Home Directories allows you to configure other things, such as redirecting My Documents and such items. It is also the default location for the Open/Save command on some applications. The main benefit is what you mentioned, it gets the user's data off the local machine and onto a network file server where it can be easily managed, backed up, or accessed from another machine. You talked about performance on a WAN, well I'm assuming those are laptops so you can always use Offline folders to cache their data locally....