With WebSphere Version 6, Express is now a full J2EE 1.4 application server. It has all the functionality of WebSphere Application Server 6.0. In addition, Express comes with Rational Web Developer. That being said, I think you will find most developers installing WebSphere Application Server 6.0, rather than Express, but that may likely be from habit because in previous releases Express did not have an EJB container nor did it have a JMS provider.
WebSphere supports hot deployment, but not in the way I think you mean. There is no hot deployment directory where you just copy an expanded EAR. You must use the administration console or a wsadmin script to install an EAR or WAR. When you install a WAR, an EAR is automatically created for you. You can specify where you want the EAR exploded; the default is %WAS_HOME%\profiles\<profile name>\installedApps\<cell name>\.
Hot deployment in WebSphere means the ability to add new components (WARs, EJB Jar files, enterprise Java beans, servlets, and JSP files) to a running server without having to stop the application server process and start it again. Depending on the kind of change, the enterprise application may need to be restarted. In some cases, WebSphere will do this automatically for you.