ftp stands for "File Transfer Protocol" . It normally runs on the port # 21. Of course ,any port can be used. FTP is a protocol [set of rules ] ,similar to HTTP [ Hyper Text Transfer Protocol ] .
FTP is used for file storage/access from networks.
Usually deployed by installing a FTP server on a machine.
As far as the differences go between windows xp professional and windows xp home, here is a good link