9 How to Create Home Directory and What is a use of Home Directory on Windows Server 2003
Home directories make it easier for an administrator to back up user files and manage user accounts by collecting many or all of a user's files in one location. If you assign a home directory to a user, you can store user's data in a central location on a server, and make backup and recovery of data easier and more reliable.
Sorce: http://support.microsoft.com/kb/320043
