And would there be any performance improvements in using Home edition instead of Pro for people who do not need the extra features? Less overhead/running services?
No performance improvements. They are the same core OS. Pro just has a lot of extra services for being able to do things, services which (in SP2) aren't on by default.
The biggest difference? XP Pro is about twice the price of XP Home.
the real big difference is pro lets you join a domain where home does not...no big deal for the home user. Also you can't remote desktop a home machine, unless you use a 3rd party program.
-Support for dual processors
-Will let you run IIS
-Remote Desktop (my favorite feature)
-Will let you join a domain
-Account based security for shares
-Will let you install Services For Unix