Setting up a server

Ok me and my friend have decided to set up a server. We are complete noobs at this and will need alot of guidance. What we are interested in at the moment is whether to use Windows or Linux and the pro's and con's of each.

Windows:
+ Easy
- Unstable
- Insecure
- Takes a lot of resources
- Expensive

Linux:
+ Stable
+ More secure if you know what you do
+ Takes less resources
+ Less expensive
- Might be difficult at start

Alright, what do you think would be the best linux to use and minimum sys requirements? Prefferably one for a much older computer.

Hay I'm the other guy setting up the server.
The specs for the comp we want to use are...
300 MHz
231 mb RAM
Win XP service pack 1

First of all I would like to know what kind of server we're talking about. Web? FTP? SQL? Something else?

However, I'd say that you need more RAM, especially if you're using Windows XP. I don't know how much (depends on what kind of server you're setting up), but you obviously need more.

As for the best Linux, well, that's like asking for the best ice cream flavor. From my own experience I can say that I had no difficulties setting up an FTP server on my Debian box. All I did was one command:

apt-get install proftpd

And then a simple configuration with a premade tool. Obviously, not the most secure or effecient way to set up a server, but enough for my needs.

we will be setting up a few different servers. But the one we are asking about is for a Webserver. E.g. Websites with ftp,php etc.