From the technet site:
If you deploy computers running Windows XP Professional in a domain that does not include Active Directory, you can manage desktops locally by implementing the following features:
Roaming User Profiles and Logon Scripts. When using either a Windows NT 4.0 domain or Active Directory, both roaming user profiles and logon scripts are configured on the user object.
Folder Redirection. You can redirect special folders to alternate locations, either to a local or network location. You do this by modifying the values under the following registry key: HKCU\Software\Microsoft\Windows\CurrentVersion\Explorer\Shell Folders.
Internet Explorer Maintenance. Instead of using Group Policy to control Internet Explorer settings, administrators can use the IEAK to apply settings to Internet Explorer clients using auto-configuration packages. The IEAK can be downloaded from the Microsoft IEAK Web site at http://www.microsoft.com/windows/ieak.
Administrative Templates (registry-based policy). Domain-based Group Policy processing requires that the User and/or Computer objects be located in Active Directory. If the User or Computer objects are located in a Windows NT 4.0 domain, then Windows NT 4.0 System Policy will be processed for whichever of these objects is located in that domain — this could be the Computer or User object, or both.
System Policy is defined as the policy mechanism used natively in Windows NT 4.0; it is a set of registry settings that together define the computer resources available to a group of users or an individual