Thank you for your reply...I have been thinking about this in the last two days. I am re-building a budget server for a charity. The existing server is a 3.0GHz Pentium 4 1.5GB ram with a Raid 1 disk, and one hot-swap back-up disk running Win2k3 that the majority of the time serves as the file server. I the last two weeks I have also installed two virtual machines on this setup: one to act as a content filter (Dansguardian proxy server) and the other being a LAMP appliance that is already hosting a PHPBB forum. The machine is also a DNS, a domain name server, and an ASP server. It is amazing that all this has been working like a charm. But, the box is old and the fans started to buzz out, etc, etc.
I have already placed the order as follows:
Intel s3200shv
Intel Xeon 3210
4GB new ram+all the exiting hardware
New case and a good power supply
All of the above for about $700
Considering my budget and the needs this is not that bad at all. I am planning to run a couple more VM's on this. The motherboard is also a good one (1333fsb ready) and hopefully in year I can upgrade to win2k8 when the bugs are all ironed out.