Suhas,
I'm not 100% positive, but pretty sure that you CAN'T run Personal Web Server on XP Home.
A while back, I had a laptop with XP Home installed on it. I wanted to install PWS just to do simple testing,and could not get PWS to work. There are some web pages that offer solutions involving some pretty complex registry hacking, but I don't recommend it (and apparently, some who have tried it agree). So unless there's another way I'm not aware of, you can't simulate a server using XP Home.
Kevin