Kelly,
the "Home Editions" are MS apps, right?
Starting with XP, some bright bulb at Microsoft thought it would be neat to offer different versions of an OS.
XP had "Home" and "Professional" editions with Home being a crippled version of the Pro edition that sells for a little less.
Early releases of Home were buggy as all get out. I guess when they went through it to disable all the features that cripple the Pro edition to make it "Home", they really crippled the whole thing.
With Vista, they really went overboard with the different edition junk.
Here is the comparison on MS's web site. There are actually even more editions, but the four listed on the linked page are the main ones in the retail channel.
Funny thing is that when you buy any of the editions, the DVD has images of ALL editions on it. It's just that the installer knows which to lay down on your hard drive.

For some, the Home edition will suffice, but I see that as someone who only wants to browse the Net and use e-mail and even then it can bite you in the back side.
I just do not see any reason for any of the Home editions to exist other than to make MS more money.
Many who start off with Home will end up needing features not available with Home and will then need to upgrade.
If anyone is buying a new computer, it is well worth the very small up-charge to get it with the "Ultimate" edition.
And for those who are going to do an upgrade of an existing computer, don't waste your time or money on anything less.
Shop around, you can find the retail box of the Upgrade version for about $120.