The document presents the final report of a comparative study to assess the services being provided to handicapped preschool children by Project Head Start and non-Head Start programs. This study is Phase I of a larger study of the process of mainstreaming handicapped children in Head Start programs. To facilitate an understanding of Phase I findings and recommendations, the first part of the report presents background information, including study methodology and the context in which service delivery to handicapped children in Head Start programs is taking place. Study findings are discussed for the following areas of investigation: mainstreaming, staff characteristics, program entry and termination, screening services, diagnostic services, planning and curricula, monitoring activities, service providers, and parent involvement. Four basic areas are recommended in which Head Start services to handicapped children can be improved: diagnostic services, program services (particularly with respect to individualized planning), program facilities and materials, and outreach procedures to seek out unserved handicapped children. (DLS)