While Microsoft has made great effort to simplify the choice of the latest operating system -- Windows 7, there are still confusions among consumers and users as to which version of Windows 7 is the best for them. The Microsoft web site lists 3 versions, with retail pricing and high-level feature comparisons: Home Premium, Professional and Ultimate. A detailed comparison, feature by feature, is documented by this article at Wikipedia.
For home users, the Home Premium edition is the typical choice. For business users, the Professional edition is recommended. If you need some advanced features such as virtual disk boot (virtualization) and DirectAccess (a VPN-like solution), Ultimate is your best bit whether you are a home user or business user.
There are several variations to the three editions that may offer additional choices for you.
Molly Wood and Ina Fried at CNET recently interviewed Microsoft CEO Steve Ballmer and asked him about Windows 7 editions, and other questions concerning Windows Mobile 6.5, Courier Tablet, Apple Tablet, Bing vs. Google, and Zune HD. Check out the video if interested.