Home on a different partition

It will not affect anything negatively. No bad performance. To make /home exist on another partition, select manual partitioning during installation from the liveCD or liveusb.

In the following images you can see the options to pick:

First, Select Manual Partitioning

Second, select the partition you want to format/partition. (In this case I have an empty hard drive. not yet partitioned).

Third, select the partition size, and the most important part is to have the MOUNT POINT entry point to /home. This will make a partition for home. Also remember to add the root partition and swap partition.

For multiple users it will not have an effect on performance, but it will add a little bit of complexity in handling user data. For example, when upgrading to a newer version, you will not need to delete or backup the user's content since /home is in its own partition. You just need to tell the newer version that THAT partition is the one that has the /home information. That is all. It will help in upgrading faster.

For safety, it will also help since if the system has an error or the boot partition has an error, they are outside the user's partition, so the user's information is not affected (except in the case where the whole hard drive dies, but this will affect you whether you do or do not do a /home partition).

I always create a separate partition for /home when installing. This has great benefits if reinstalling or trying another distribution. Firstly decide on your partitioning strategy. I usually set things up with a root partition of 20GB a swap partition of 2*memory size and then allocate the rest to the /home.

Go through the installer, and at disk partition step choose the manually partition the disk. Assuming you are using the whole disk, first erase the partition table, then create the partitions in order. First the root partition, size 20GB, mount point "/" and set to format new partition, then swap, then the home partition, size rest of the disk, mount point "/home" and reformat.

If you are reinstalling, again go to the manual partitioning option, this time just use the partitions that are there, but you will need to set the mount point and whether to reformat for each partition (except swap). Remember to reformat the root partition but not the /home partition.

Somewhat related to your question.

If the /Home location is on a partition on another drive, there will be a performance improvement. Not a huge gain, but there is an improvement.

The system will read program data from one drive and the data file/configuration info from another drive. Moving the I/O to two drives results in an improvement in load times.

You still get the benefits of having a separate /Home location, just one that also gives a performance boost.

FYI

You have the BEST manual here that explains exactly every step of the process.

How does it affect systems with multiple users?

It foes absolutely nothing, you will feel like you have your /home folder in your root folder. This is done just in case you want to reinstall or something. Having one user or 100 users won't make any difference regarding this question.