Cache mode stores it both on the client and exchange server (incase there is network disruption... which never happens in a Microsoft Enviroment). Differences... XP vs 2003...
"What are the major changes between Office 2003 Editions and Microsoft Office XP?
A. Office 2003 Editions programs include many significant changes, including:
• Broader support for Extensible Markup Language (XML). Microsoft Office Word 2003, Microsoft Office Excel 2003, and Microsoft Office Access 2003 offer XML schemas you can customize for using data, smart documents, and programmable task panes (such as the Research task pane).
• Greater integration with Microsoft Windows® SharePoint™ Services. This provides increased collaboration through team sites, such as Document Workspaces, Meeting Workspaces, and other collaboration tools.
• A redesigned version of Microsoft Outlook® with an improved Reading Pane, cached memory, e-mail conversation thread condensers, and other improvements."
Also, the ability to connect to Exchange server using HTTP/RPC (which I have not implimented, since OWA/SSL works fine).