The workstation uses the profile with the newest date. If a profile exists on the server but not locally, the workstation downloads and uses the server's version. If a profile exists locally but not on the server, it uses the local copy. If a location doesn't exist in either place, or if the user has logged on to the machine for the first time, the workstation uses the Default User Profile. When the user logs off the workstation, the workstation saves the profile under the user's ID along with any changes the user made during the session.
User profiles work in the same way in both operating systems.
They're made up of a combination of registry settings and directory entries. However, that's where the similarities end. Because of the underlying architecture of the operating systems, you can't change from one operating system to the other. Microsoft stores the registry settings for Windows NT Workstation and Windows 9x in different files. NT uses the NTUser.dat, NTUser.dat.log, and NTUser.man files.