Strategically, Home Basic is arguably the edition of Windows Vista designed pretty much for users with the basic computing needs and quoting M$:
"It is easy to set up, it helps you use your PC more securely and reliably, and like all of the editions of Windows Vista, it is compatible with the widest range of software, devices, and services that you use and trust.
If you simply want to use your PC for tasks such as surfing the Internet, corresponding with friends and family using e-mail, or performing basic document creation and editing tasks, then Windows Vista Home Basic will deliver a safer, more reliable, and more productive computing environment."
So I think it's safe & only natural to assume this is where more than half of the people currently running XP Home fall into - else M$ would not have spliced Vista "Home" into Basic & Premium IMHO ;-)
And being offered at a suggested retail price of $199.00 for full package & $99.95 for the upgrade package, it is not hard to imagine current XP home users as the primary target market.