After trying out beta, I think it needs lots of improvements. Here are just some that came to mind...
Allow people to transform pics, videos, and audio in their harddrive into pictures, Blu-ray disc, and audio CD or cassettes in Home where they can hold and give to people (which the recepient can view/hear in Home, or transfer to their PS3 harddrive).
Allow people to use the Sixaxis to motion sensing to move their Home avatar.
Allow people to enter a spacecraft and go walk on the moon, or build a habitat on the moon (the gravity would be less there too).
Get simple sports put into Home (like dodgeball, volleyball, tennis, swimming, arm restling, skiing, skydiving, snorkling, ice-skating)
Get simple puzzle games put into Home (like blackjack, poker, garden maze, connect five, go, soduko, etc.)
Put NPCs from PS3 games into Home that dispenses out virtual Blu-ray discs (or pictures or CDs) that become downloadable games for their PS3 (or even themes, pics, audio and other things).
Let people have an option to attach their avatar to another avatar, so that their avatar automatically follows where the other avatar goes.
Remove the tall plants in summer home and replace them with normal ones you can buy and move.
The fonts are too thin for gaming space entrance (Japan and the asian Home servers)
Let people stream videos and audio on their ps3 harddrive to vitual TV and speakers in Home.
Create on-demand loading of the places so there are no wait times (like GTA4 and Fallout 3).
Allow PSN wallet to link to a bank account so you can buy and sell stuff, and deposit earned money.
Allow players to enter cars and elevators instead of instant teleporting.
Allow people to buy a pet that you can grow like a tamoguchi.
Let people to use pics in their harddrive as wallpaper or t-shirt pics.
Allow people to enter a fighting ring with their avatar and then it becomes like Sega's Virtua Fighter: even Virtua Racing if people can buy cars.
Allow studios to be connected to each other and be allocated in same buildings, allow the use of an elevator.
Let people drive a car to their house if they earn enough to buy a house with garage.
Put a virtual ps3 or pc to allow entering webrowser from Home, or choose songs to play from ps3 harddrive.
Allow PSP to use PS3 ad-hoc to use ps3's wired internet to go online and maybe put a virtual conference phone to use Skype or Playstation Eye from PSP or PS3 to initiate a chat.
Put a virtual clock app in home that tells time/date, and an alarm clock function that can sound an alarm or play songs from mp3 or an internet radio station.
Allow PlayTV to output to virtual TV in Home.
Allow people to give PSN money to another PSN account.
Allow building block tools for users to design their own place, space, or apparel (let them buy fabric if it is a must)
Let people register their game discs and downloaded games in Home, and this opens up new areas to enter the game from Home, or virtual boxes of the games will show up in the Home game shelf.
Allow people to purchase a superpower pill that turns them into superman and then they can fly in Home.
Allow a virtual camera to take photos in Home or capture video to harddrive.
Allow virtual tape recorder to capture audio of Home user's speech.
Put a plane or boat in Home so users can visit other country's Home.
Allow people to have pen and paper to write stuff, and let people give them to people to read, which becomes a PSN message (or they can read psn message in home).
Allow small size children in Home.
Where is that virtual Sony Bravia that plays TV video from harddrive and internet?
Allow people to drink Red Bull to get wings to fly for a few minutes.
Connect Home to google earth or street maps to allow people to place their home and even show in Life with Playstation.
Let people buy or sell books, video, or music they can use in home.
Allow programers to create extensions to Home by opening up the API and host Home externally, or downloaded and hosted on their PS3 (the user's ps3 would be like a graphical mud server extension of Home)
Open up the PSN store so Sony can take a cut from garage game studios, and provide the SDK for free.
Allow people to have a mailbox to receive PSN letters and movie videos (like netflix) to watch in Home, and even receive checks or cash that becomes PSN wallet credits (or even coupons for PSN store freebies and discounts)
Let people have a closet that reflects what clothes they really have in Home.
Put buses, taxis, and subways in Home and let people earn PSN credits when they become tour guides, teachers, drivers, entertainers (like comedian or singer), and graphics designer etc.
Let people earn special emotes like Solid Snake movements that may or may not affect other users.
Let people upload special 3d avatar movements via xml file if they know how to edit it.
Let people command machinery in home or small RC cars, boats, and helicopters.
Let people play PS1 games in Home.
Let people get on skates or bikes to travel faster, if no cars are available.
Allow curtains in houses, and let the sky reflect the user's real time: like noon, midnight, or sunset.
When you bump into others, the Dualshock 3 vibrates.
Let people swim, jump, and climb ladders.
When people idle in Home let their avatar fall asleep.
Home is boring because there are no growth or goals in the simulation. You have to let people be able to grow their avatars, like a way to earn credits that they can spend in the stores. The arcade machines are nice but not realistic (arcade machines give out clothes and items?). Perhaps register the high score of arcade machine players, and people get a message delivered to their virtual mailbox (like a coupon) that they can redeem in the shopping mall. Now back to the growth. Let there be tests that the users must go through where they earn some sort of scoring, and as you accumulate them you get more abilities. One way is to let people earn REAL psn credits that they can spend on playstation store items, or deposit into their bank account. Another is to allow abilities like RPG games that are accumulated to reach higher levels. For example, if you are able to win at certain puzzles or mini-games in Home, you get a entrance ticket to go to another area in Home, and that area opens up more challenges that allow you to visit even more places or earn more items or real PSN credits. Of course, you can add in unrealistic abilities (like spiderman climbing up buildings, or superman flying, etc), or realistic ones (ability to drive a car or lead a group of people or fly a plane carrying people, etc). These abilities will have to be earned by either buying them or earning them via an RPG like adventure. There are lots of ways to do it... you can even allow the people to get assigned special roles when they enter simulation games like war games (shooter, medic, etc), or Home roles like teachers and tour guide people, etc. But the main thing is that there must be something to work towards, or else everyone will just hang around dancing and get bored with Home in a few weeks.
Maybe some of these ideas will stick and get implemented or people will request them for Home 2.0. Let people own things in Home, preferrably things that are alive, so they can come back and check up on them. For example, get a big huge fish tank that people can buy or earn fishes that they can toss inside and it will grow as they come back and view it. It doesn't have to be fishes, it can be anything, like maybe pets, or insects, or anything. When they come back they can buy things for their pets or things. Also, put a bank into Home so people can really do real money transactions. Once people get used to it they will start using the money to buy downloadable movies from Home or other real items. But you must have it both ways, must be able to deposit money back into bank account, or people will just treat it as recession causing device instead of an economic stimulus device. Many companies in the world nowadays only take your money (traditional item exchange for your money). Some companies provide free stuff or services (free software or videos or music or online services and encyclopedia information). The best models are companies that gives you money and allow you to earn a living (affiliate services, click ad servces, and other auction companies).