TYPHOON is a capability-aware peer-to-peer (P2P) system. It exploits the heterogeneity of nodes in the system based on the concept of virtual homes. Nodes participating in the system are classified as good and inactive. TYPHOON uses resources provided by good peers. It is thus more reliable and agile than a naive structured P2P system. When a good peer is overloaded, it picks a suitable inactive node and migrates some loads (i.e., virtual homes) to that node. However, migration of virtual homes may cause instability in the system. TYPHOON thus incorporates a mechanism for tracking virtual homes. A migrated home can receive states of relevant homes using an adaptive, logical tree structure that can also react to system heterogeneity, node loading and network locality. A migrated home can also proactively discover the state of an interested home to ensure the correctness of lookup. We evaluate TYPHOON using theoretical and simulation analysis. We also benchmark TYPHOON using a prototype system on 34 desktop PCs. The results all confirm the effectiveness of TYPHOON.