I tried this and ran into a conflict problem. Different distros are going to configure your desktops differently. What Red Hat configured on my /home drive for Gnome and KDE, Mandrake rolled over and died with!
I took the lazy way out and set up a pseudo-/home partition. Simply, I added Linux partition through Partition Magic that both distros put in the /mnt subdirectory. I guess with a little work, I could have had that partiton mounting under the home directories of each, also, by creating a special folder in /home (or /home/username) and changing the mounting point in /etc/fstab.
Other than that, maybe someone else can help you with resolving the desktop conflicts.