I got it..

can someone place explain why in sed, using single quote ' ' makes this work versus double quote " " ??

[root@rleeserver tmp]# cat yaho11
#! /bin/sh

dir1=$1
dir2=$2
echo $dir1
echo $dir2

find /home/"$dir1" -type d -print |
sed -e 's;/home/'$dir1'/;/home/'$dir2'/;' |
while read newdir
do
mkdir $newdir
done