Ok, everything I write here is speculation.  Back in January 2005 I wrote a blog post titled "Windows Server, Home Edition" (My blog was called "Blobservations" back then).  It got a bit of linkage a few weeks later from folks like Kindel and Scoble, but the interesting angle is that even before there were any public links to that post, I got almost 500 hits that appeared to come from the Microsoft campus (according to the IP addresses in my server logs).  I'm guessing that I had either stumbled upon something that they were already working on, or that they actually thought it was a good idea.

Later in June, Mary Jo Foley reported on some comments from Bob Muglia, I added this update to the post in my blog:

Looks like this may actually come to pass.  Microsoft Watch's Mary Jo Foley reports on some comments from Bob Muglia.  When asked about the possibility of a server product for the home, he replied: "We are always looking for new opportunities where server technology can be leveraged, and the home definitely represents an exciting new area that we are looking at along with many others. Much of the great storage, replication, and management technology would be great in a home.  We have seen many people install Small Business Servers at home, which really works quite well." 

I don't remember where, but somewhere I saw someone refer to this Home Server idea as "Quattro".   So my guess is that Quattro is a version of Small Business Server that has been forked and modified for the home network. 

Updated:

The Paul Thurrott link above (http://www.winsupersite.com/showcase/winvista_editions_final.asp) is where I got the "Quattro" reference from.  It's actually from March 2006, not 2004.