Yeah, /home is a quirky thing. I really haven't paid that much attention to it since I normally leave Finder in default mode (I let it hide things flagged Hidden). If I didn't change ~/Library to nohide I'd probably leave it in show invisibles mode. I'm using Terminal more and more these days so hidden vs. not hidden is just a command line switch.
From what I remember folders in /home are supposed to be roughly equivalent to NFS mounts, where they get mapped from another system so everyone's home folder is on all systems. /home itself technically is just a logical place for the home folders to go, but it's a quirky remapped folder from another part of OS X (hence autofs). Basically you stuck a bunch of configuration data into NetInfo and the /home folder built itself. Neat to see, but I never really used it.
I've read of Linux guys going through the trouble of expunging /home from OS X so they can use it for Linux stuff (some Linux distributions use /home/ for their user folders, this way they can share scripts and whatnot from Linux to OS X), only to find it got clobbered by an OS X update or upgrade.
I'd generally just leave it alone. Apple will eventually remember its there and expunge it from the innards of OS X. Breaking who knows how much in the process.