Does the home page need to be a front page menu item?

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Joomla 1.5Joomla 1.6Joomla 1.7
No. In Joomla! 1.5 and newer, the home page can be almost any type of menu item and can have any name. The only requirement is that one menu item must be assigned as the "Default" menu item. This is the menu item that will display when a user navigates to your URL.

Also, any menu item can be assigned to use the "Front Page" menu item type.