I've been running XP Home since September. It works pretty well, but is less than perfect. In particular, there are problems with login accounts. ALWAYS have two accounts that have admin privileges. When one dies, you need a spare.
The outstanding benefit I noticed was that XP actually uses memeory effectively. A couple of years ago, I ran tests of a company's apps on several versions of MS OS products with memory from 32MB to 448MB. They peaked out at 128MB, and actually slowed down at 256 MB. Yes, we tuned and retuned, hoping to improve speed with more memory. Win 95, 98, NT 3.5, 4.0 did NOT use more than 128 MB effectively.
XP on the other hand, is faster with 256MB, and bringing it up to 512MB improved yet again.
I have not tested how Win2K performs with more memory, but I understand that 2K is also a good choice, and I would not buy XP just to replace 2K. If you get XP with a new system, I would not necessarily dump it either.
My current system is a 1.5GHz Pentium 4 with 512 MB, and I'm pretty happy. I plan on adding an additional 512MB DIMM in the near future.
One caution, lots of bits and pieces don't work with XP. I had to scrap my firewall software, as it did not run with XP, and I set up a hardware firewall (and networked my old 233 MHz K6). I had to buy a new Anti Virus package, as the old one doesn't run with XP either.
I have assembled systems, and I have purchased them, and this time I bought one assembled. I could not buy the components in this system for the price I got for the complete name brand box, even excluding warranty, support, and the cost of time to assemble the hardware and set up the OS.