I second everything Christina C. said. When the in-home daycare I had taken my son to was closing, I decided to stay home and try my hand at having a home daycare, and take on the other children from that daycare. But unfortunately, it didn't work out. I was normally a patient person, but that patience ran out when I watched two children with demanding and defiant personalities. I have the patience to now do it on an as-needed basis, but daily was too much for me. And I love children! I have a huge family with many nieces and nephews, who I have cared for and even been practically nanny for, ever since I was 12. So it's not like I didn't have experience watching kids, or even on a full-time, daily basis.
But it wasn't just the children - having my home in a constant set-up for daycare, with two pack-n-plays, a changing station and storage with all the supplies (linens, diapers, burp cloths, etc) a permanent presence in our living room, made it seem I was never "off duty." Whenever my son was not feeling well, he resented having to share me with the other kids - kids whose "wheels" were "squeakier" than my son's, so to speak! I tired of having to hide his birthday and Christmas presents, because he had to fight over them before he really even had a chance to play with them, and they'd often be broken before they were a week old. It just all made it seem like our home wasn't our home anymore.
Dealing with differing parenting styles was difficult as well, and communication with the parents was sometimes difficult (i.e. a child who has runny poop daily, causing diaper blow-outs 2-3x a week, and the parents refused to acknowledge a problem). My husband said I cared too much about their health/behavior/etc, but how could I not? As their full-time caretaker, their well-being was as much my responsibility as it was the parents'!
Luckily, I had no problem whatsoever with my parents as far as payments and late drop-offs/pickups - they were very dependable. But I know that can be a problem for some providers.
Please don't think I'm trying to be negative!! Just sharing my experiences. There are many many people who do it and love it. It just wasn't for me. It is a GREAT way to stay home with your own child while still making an income. I recommend making a contract outlining your policies for payments, sick/vacation days, what happens when their child becomes ill at daycare, etc. It can be every rewarding as well! I just wish I had known how things were going to turn out and maybe I would have done things differently in the beginning, or mentally prepared for it. I was very afraid of offending the parents, and scared to give a two-week notice for one of the children (who made our daily lives miserable - my normally loving son became irritated every morning when she arrived).
If you choose to do it, I wish you luck with everything! And sharing the responsibilities with a friend sounds like a great idea.