Ah, knowledge - it's a useful thing!
PlayStation Home stores data and information in multiple places on your PlayStation 3 Console. This thread is here to tell what each type of data does, where it can be found and whether or not you should touch it.
So - Let's get started!
PlayStation Home stores data in 3 areas on your PlayStation 3 Console
These are:
1. Save Game Data
2. Game Data Utility
3. Under [PlayStation Network] on your system's XMB
So - what do they do?
Save Game Data
The Save Game Data for PlayStation Home stores all the personal settings for your account. This includes:
Avatar presets (the way your avatar looks, and the clothes he/she wears)
Options settings (tinkered with the options in your PDA? Those choices are saved here)
Furniture layouts (made your personal spaces look pretty? your interior design concepts are stored here)
Deleting your Save Game Data will mean you can still use Home, but when you next log on you'll be treated as if it were your first time in Home. Deleting the Save Game Data means you'll need to set up your avatar again, and redesign your personal spaces. Good if you fancy starting a new life, bad if you spent
ages doing this in the first place

Game Data Utility
This is the place where external applications tell PlayStation Home to give you stuff! In short, if you earn a reward by playing a game other than Home, that game will tell Home that you've earnt a reward by writing data to the Game Data Utility.
Be warned - if you've just earnt a reward in an external game and delete the Home file in the Game Data Utility before you log on to Home and claim it, you will have to earn that reward again.
Once you've claimed a reward, your entitlement to it is stored on our servers - so deleting the Game Data for Home has no effects unless you are yet to claim a reward. This file is literally just a place for other applications and games to communicate with Home.
Under [PlayStation Network] on your system's XMB
This is the big one. With version 1.3 - you are able to select how much data you want Home to 'cache' (like short term memory - the more of it you have, the faster you can access stuff you've seen before). All that data is stored here.
Deleting the Home icon on your XMB means deleting PlayStation Home. If you do this, you will need to re-download and install the Home client. However, doing this will not remove your avatar settings or anything personal, unless you also delete the Save Game Data.
If you experience problems with PlayStation Home, we may advise you to delete the Home icon and redownload the application. Have no fear, once you've done this everything will return to normal, provided you dont delete the Save Game Data.
I hope that explains the ins and outs of saving stuff!
MB
Message Edited by MusterBuster on 02-10-2009 04:54 PM