In a nutshell, here are the basics:
Both Windows XP Pro and Home [...] support both dual core and quad cores processors as long as they are on the same processors. There are no additional licensing fees per core. But when you have a system using two processors, only Windows XP Pro supports this function.
Microsoft states officially:
“Microsoft Windows XP Professional and Microsoft Windows XP Home are not affected by this policy as they are licensed per installation and not per processor. Windows XP Professional can support up to two processors regardless of the number of cores on the processor. Microsoft Windows XP Home supports one processor. “