For every partition of a positive
integer n in k parts and every point of an infinite Grassmannian we obtain a solution
of the k component differential-difference KP hierarchy and a corresponding Baker
function. A partition of n also determines a vertex operator construction
of the fundamental representations of the infinite matrix algebra gl∞ and
hence a τ function. We use these fundamental representations to study the
Gauss decomposition in the infinite matrix group Gl∞ and to express the
Baker function in terms of τ-functions. The reduction to loop algebras is
discussed.