Should be relatively easy to copy the contents of C:\Users\Username from one to the other.
The one caveat being that you can not do so while either of those two users are logged onto the machine.
Use the hidden administrator's account to do so.
It's explained here
http://windows.microsoft.com/en-us/windows/fix-corrupted-user-profile#1TC=windows-7
It's the same process whether the profile is corrupt or not so you can ignore the title of the article.
And yes converting to a Work Group is probably a better idea for your purposes. You'll just have to create the user structure on the server to include your new account(s) details UserName / Password for sharing purposes.
And make sure that you either know or create admin users (names...