Common /home partition for 2 flavors of Linux

In principle, yes, it is possible; I don't know if it is a good idea though.
The problem is that there could be some "system" file in your user directory that could be used by both systems with random results.
In any case, if you want to try, set up a partition with /home and add it to your fstab file(s).

Please can you give it to me step by step so that I do not blunder, I am not very sure if I know how to do what you suggested.

I would agree with Cesare that it's not a very good idea. I did this with two versions of Ubuntu and things got rather messed up. I would suggest you set up a /home for each (or just leave / and /home on the same partition as in a normal install) and make a separate shared partition for your files. That way the system files that are stored in /home won't get written by one os and then the other. I would also suggest a bit more than 4gb for each os. I think 8-10gb would give you room to breathe and you would still have a good amount of space for the shared storage. Just a suggestion.

yes.. Min of 10 GB for / and /home and min of twice the size of physical memory for swap partition space for real smooth running of appswould be a good idea.. What jim and cesare told was dead right.. I did this with mandriva and Ubuntu edgy and got sucked up...:)

How do I add a /home partition to an already partitioned drive? Will it create any problems to do this?

First of all you have to make a new partition, unless you have one already.
You can use for instance gparted to do this (I would actually recommend a CLI tool like sfdisk or parted, but then this might not be appropriate for you).
Then follow the instructions of this link which summarise quite clearly what you need to do:

http://ubuntu.wordpress.com/2006/01/29/move-home-to-its-own-partition/

And YES this is a dangerous operation that can make you loose all your data or even your complete installation, so be very careful and if you do not feel confortable, don't do it.