everything is running (oddly for Vista) rather smoothly. I know plenty of small companies that have upgraded to Vista with no problems at all, and my own office now runs Vista on all six computers, plus three laptops. There haven't been any problems at all.
I'm slightly puzzled about this software problem - are you sure that the software company has said their program will not run in Vista, and not simply that they won't provide support for the Home premium version?
Is this a mainstream product?
I certainly wouldn't downgrade these machines to Windows XP unless there's a very good reason, and you certainly can't use the OEM serial keys from other machines to install it on these new ones - you'll be in contravention of the licence terms if you try.
I suggest that your father questions the software company more closely about their product. If it will run in the business version of Vista it should run in Home premium.