Doesn't IE have around 5 major critical flaws that still aren't fixed for over a year? (And at least Mozilla has a workaround that really ought to be used unless you need IDN - if you don't visit international websites, disabling IDN is a good idea).
As for the differences in the versions - starter is your crippled version of windows, while basic is like XP home. Home Premium has a few other features, like MCE software. Pro will have the XP Pro advanced networking, but no MCE software, while SBE and EE have similar small changes. Ultimate will have MCE and the advanced networking available to Pro/SBE/EE. Of course, only Pro/SBE/EE will have volume keys... Oh yeah, they also add a nice heaping pile of DRM restrictions... (Home Premium... Cut down XP Pro, add in DRM...).
In other words, that computer special maybe cheaper because they went from Home Premium to including Home Basic (and the print will say "Windows Vista Home"...). After all, I'm sure the difference in price will probably account for a large part of the savings.
And none of them make IE or Media Player separate... so the EU ruling doesn't apply.