This is a useful feature to allow the firewall to be in two different
states, depending on whether the PC is plugged into its "home" trusted
network or not. The domain profile contains the settings that are active
when plugged in to the network, and standard contains the settings that are
used otherwise. So, you typically configure both.
Bear in mind, though, that if you are sat on the LAN and also connected to a
foreign network, the firewall will be in the "domain" state. This can be
dangerous.
Use the command "netsh firewall show state" to get information about the
current state. Try experimenting by plugging in and unplugging the network
cable to see what happens. The output of that command will tell you whether
you're in the domain state or the standard state, and also whether the
firewall is enabled or disabled.
Regards
Oli