Why do I have a Desktop in my Home directory (Mac OS X)?

When I go to Finder, underneath the drives, there’s the list of Desktop, my Home icon, Applications, and so on.

The odd thing is, when I click on the Home icon, it shows that Desktop as a sub-directory. When I click on the sub-directory Desktop, it shows the same icons as are on the main Desktop.

How come Desktop is there twice??

The thingy on the left pane of your finder window is a list of convenient shortcuts. Every user has a Desktop directory in their home directory, and the icon on the left links to that.

Similarly, the Documents icon on the left links to your Documents directory. The Applications one actually links to the global /Applications directory.

That Desktop subdirectory holds the contents of your desktop.
If you log out and then log in as another user, the home folder will switch to that of the other user, and the contents of that users desktop folder will show on the desktop.
Each user gets their own desktop, so the Mac has to have a desktop folder for each of them.

What Documents icon?

There should be a Documents icon in the Finder sidebar. If it isn’t there, it’s because it was dragged out of the sidebar (either accidentally or deliberately). If you want it back, open a Finder window, go to your Home directory, and Find your Documents folder, then drag that icon to the sidebar.

BTW, you can drag any folder icon to the Finder sidebar, so you can put commonly-used folders there for easy access.