I explained above that the 'hack' can't add features which aren't present on the XP Home CD.
The 'hack' referred to originated from an article in German magazine C'T which was translated, posted on the web, reported by news site "The Register" and then spread all over the web by people who read a few words, don't look into it any further, and then walk away with the wrong impression. When originally reported by "The Register" it was claimed that the modification turned Windows XP Home Edition into "XP Pro Lite", and many of the other articles you'll uncover with Google will also refer to it as "XP Pro Lite". It's referred to as a 'Lite' version because it's missing bits!
The hack itself involves using a hex editor to change two bytes in one of the setup files. This modification enables a few features which are actually present on the XP Home CD but not enabled by default. Remote desktop is one, some of the extra security features of the NTFS file system are another.
What the modification won't do, however, includes:
* changing the defrag routine to the more capable one included with XP Pro. You can't 'enable' what's not there on the CD.
* adding multi-processor support. Again, you can't enable what's not there to start with.
* enable domain authentication capability. Same old story. It just isn't there on the CD.
Anyone who performs the modification would need to slipstreeam the service packs into the installation CD they were preparing, by the way, because the Windows Update capability would be 'broken' after it was done.
As to legality, well no, it's not 'legal' because the code is being altered. But do I personally think Microsoft would be jumping up and down about people who carried out the operation and ended up with a 'pretend' copy of XP Pro which doesn't have all the features people really need from that OS version? Nope, not at all. In fact I think the people at Microsoft would look at this, think "Meh!" and then sit back laughing at the silliness of it all!
Sorry to burst the bubble a bit, but those Google results should really be examined more closely. There's not really such a thing as the Philosopher's Stone!