XP does not need to be shut down unless you are installing updates or programes..
Standby allows the PC to be permanently connected to the web for Broad Band so it is always ready.
Leaving it on all day uses a little extra power and the temperature stays the same while standby lets the temps cool off a little and uses less power.
Some argue that it is better to leave your PC on (or on standby) than keep turning it off and on because the hardware suffers from repeatedly heating up and cooling down and can cause your CPU some damage, heat causes it to expand and cooling causes it to contract. Others will argue that manufacturers have taken this into account when designing it.
I leave mine on and let it go to standby after 2 hours of no use.