I think the idea is that the "Home" functionality is built-in, but say media center is an option, domain/security permissions is an option, and maybe "server" is an option (to transform into Windows 7 Server).
It's stupid that they have like 9 (home, pro, server, server small business, etc.) versions of a very similar solution (an operating system). They're all fundamentally similar.
While it's true that there are a lot of versions, there aren't 9 boxes side by side on a shelf in a store. I think home, pro and server is all that should be in a best buy or equivalent.
More specialized but very real and useful cases such as enterprise, unlimited, small business, etc should still be available but only through a vendor or website.
It's stupid that they have like 9 (home, pro, server, server small business, etc.) versions of a very similar solution (an operating system). They're all fundamentally similar.