The main difference between the Pro and home version are
Pro=advanced networking features, such as joining domains, large network env, advanced configuration..mainly for use with large offices, corprate, or home business..
Home= Just that..still has the awesome Windows XP stability, but just basic function in regards to networking. You can setup a small home network and such, but you are very limited for network options.
As for the hard drive issue I have encountered that on some occasions as well. It doesnt neccessarily mean the drive is bad, but rather a hickup in the system preveneted it from formatting all the way. Most of the times either the win XP cd is dirty or the CD-ROM drive is dirty which will cause it to hault since it is booted from the CD and the formatting tools are contained on the CD. I usually keep on trying to do a full format over and over untill it is successful
A full format basically erases all previous data, sets up the file system, and checks the disk for errors but physically and magnetically..where as a quick format does not check for errors therefore wayyy faster..this is bad because you can essentially be using a drive that is ready to die and unfortunatley will not find out untill is has crashed and all data is lost