which is better? Windows XP home edition or professional?

Windows XP Home Edition is designed for home users XP Pro is designed for buiseness and power user so It has more features that people like that may use.

Essentialy as amdathlonxp2000 said Pro is for buiseness so it has better security i.e it comes with it's own ability to encrypt data. Also it has the ability to remove Simple File Sharing and have group and user polices as well as act as a server in small office environmetns. (like 10-20 machines). Plus pro needs an 266Mhz CPU minimum where as Home needs a 233Mhz :P. Essentialy Home is good for as it's name states home and pro is for advanced work features and power users.

i'll add: pro supports active directory, home doesn't. almost always home users use and benefit from peer-to-peer networks, so xp home works fine. but occasionally a home user wants to use a windows server, and then there can be problems, when the server is set up for active directory. this is mainly relevant for people who are considering, or doing, business from a home office. "If we don't succeed, we run the risk of failure." - BILL CLINTON

In ohter words, XP Home only lacks a few things that most people never use anyway. It's pure marketing hype for MS to even have two OS--more people will go for Pro because it sounds better and they will pay more money.

Thats true but you think it's redundant to ahve 2 versions of XP well vista has i think 3 or 4 as well as Longhorn for server comps :P. Talk about money grabbing.

actually in my experience, 2 versions wasn't enough, because XP Home was still too bloated and complicated for many home users. There's so much in there that a very basic PC user doesn't use. There should be a "Windows Lite" which is the simplest to use of them all. Well, that's my 5c. "If we don't succeed, we run the risk of failure." - BILL CLINTON