What is stored in /home?
 

If I have a seperate partition for /home and then re-install Linux are ALL my users settings retained. Such as screensaver, desktop, themes, preferences etc?

Yes /home will preserve all your user settings, just make when you re-install you choose to mount the proper partition for /home. However it will NOT preserve root user settings or system configuration settings such as hardware, kernel or loaded services.

Like above it will maintain any relevant settings.

will show all files/directories including hidden ones, it is pretty obvious what they are from their names.

be careful though when moving to a distro with more upto date packages, major versions of software can included changes to configs etc. rendering them incompatible, and can even cause crashes/instability

When you reinstall Linux, make sure you do not format the partitions that you want to keep intact.

Thanks to all for the answers. I have been using Linux for a quite a while now but had always assumed that /home was just the same as 'My Documents' in Windows. But if i understand correctly it is a bit more than that?

Yes it is quite different: /home/[your username] in linux is like C:\Documents and Settings\[your username] in windows (NT/2000/XP) or C:\windows\Profiles\[your username] in windows 98/95, however linux alsso uses it as a My Documents type space as well.