Workgroup or Domain

I have a client with 5 computors , 4 running XP Pro and one XP Home.

I am about to include a new DEll Server with Server 2003 r2 Small Buisness edition.

I understand that XP Home cannot join a domain, whats wrong with just using a workgroup instead.

Plus and minus. The have two shared printers, scanners, want to use the Exchange server ( Outlook on the server for email and messaging ) I also need to install a legal program ( Pro Doc ) that would centralise the client data base.

Any sugestions as to the best ( Easy )solutions