I'm familiar enough with the different versions to say that the vast majority of people do not need Ultimate.
One big difference with 7 is that every higher version is a superset of all lower versions. In Vista, Home Premium had media center but no remote desktop hosting, while Business had remote desktop hosting but no media center. You had to get Ultimate to get both. With 7, Home Premium has media center but no remote desktop hosting, while Pro has both.
Honestly, Home Premium is enough for most people. The two biggest things missing from it (remote desktop hosting and the ability to join a domain) won't be missed by most people, and remote desktop hosting can easily be replaced by third party alternatives.