Well you could log into the system as root since roots home directory isn't in /home it's in / but being ubuntu the root account is disabled by default so that may throw a wrench in the works.. Guess you could do most of the work from knoppix or something..
You can create a partition,
edit your /etc/fstab to mount that new partition as /home
Mount your new home partition
create new users so the user directories will be created in /home
and you should be good to go..
Search for MOVING your home partition.. it will be a similar process the difference being that Moving Home means you have an existing partition with data you wish to relocate to a larger partition or separate hard drive.. where you need to start from scratch.