"If i use linux can i connect to my home network, with one pc being on windows xp pro, would they be able to communicate?" - To share files? ...But yes you can have 'em running together.
"Another question, i heard to run windows programs you have to use a windows emulator, does anyone know of a good one and where i can get it?" - click here
"And finally, will all my current hardware be compatible with linux, you know cause each piece of hardware has its own drivers and i don't know if it will all work." - Well at a guess, yes but without know your hardware were stuck.
Which distribution are you thinking of uisng?