Dan,
I would like to know more about XPe myself. I can tell you from a user standpoint, there's no difference between it and standard XP as far as the GUIs go. XPe is slimmed down quite a bit, though, especially when it comes to clicking on any of the Help buttons. If you do that, XPe will simply say that "this feature is not supported." I can understand the reasoning behind deleting the various Help files in XPe, which do exist under standard WinXP, in order to save memory space.
What is apparent, though, is that the XPe binaries either parallel or are exactly the same as those in WinXP. Otherwise the driver supporting my Speedstream SS2501 wouldn't work under XPe, nor would the CM15A. So my guess is that XPe just removed a bunch of the fluff one sees in XP but left enough of the binary framework in place such that many of the device drivers under WinXP will also work under XPe. Just speculation on my part...
My HP T5720 has 512MB flash memory built in, and XPe takes a little more than half this space. The remaining space is allocated to whatever applications you have which can fit in with what's left. In order to save anything to the flash disk, though, you have to use a special utility, otherwise your changes will be lost during the next boot up. This is a bit of an annoyance, but HP said it was necessary to keep the flash disk from constantly being written to.
Sorry I couldn't offer you more insight into XPe. It's nearly as much a mystery to me as it is to you. Like I said from the user point of view I can't see much difference. It's just as easy (or as hard) to use as regular XP. It may not be much help, but perhaps you can visit the HP website and take a look at the specs for the T5720 that I'm using.
Cheers,
SinkingFeeling