what you can do with linux
there are plenty of things that you can do with linux. i’ll make this post simple so that it doesn’t sound so overly technical. please remember that you’d still have to do a lot of reading before, during and after setting up these systems. no spoon feeding here. 
linux usually comes in two “flavors” — the desktop kind and the server kind. here i’ll try to focus on the server side. servers usually run “headless” meaning you will not need a monitor to run the thing on a daily basis. you’d only need one during the installation and setup of the server.
if you’re asking how do i stuff on the server without a monitor. i usually use four programs running from my desktop. i use firefox for most of the configuration and monitoring duties (cc comes with a web-interface), winscp is used to copy files to and from the server. win32pad is a text editor i use create or modify configuration files. i usually use this in conjunction with winscp. and lastly, putty is used as a text-based console/terminal program — similar to the command prompt in wondows — so i can see what’s going on in the server in real time.
file server
to me, this is the easiest to setup. i use clark connect (cc) community edition along with samba to do the file serving duties. cc is a “powerful and affordable internet server and gateway solution”. although it has its own firewall, i normally do not use it because i prefer to have the firewall in a separate machine mostly for security reasons. when installing cc you have the option of installing samba at the start. this will get your file/media server up and running sooner. if you encounter problems, there is always the cc forums to run to but as with everything else, read the fine manual (rtfm) first and the stickies in the forums before posting anything. there are tons of how-tos on the internet if you want more info. now you can say that you have your own media server.
hardware requirements for a file server wouldn’t be that steep. all you really need is plenty of memory and a lot of diskspace. the cpu does not need to be the top of the line — a 2 ghz pentium 4 would be plenty.
before i move on, i’d like to note that cc is a no-nonsense server. it tries to devote the resources available to it — physical memory, especially — for serving so it doesn’t come with a fancy graphical user interface, although i could imagine installing one on it. all you’ll see on the monitor once you’ve finished setting it up is a text-based login prompt.
if you’re interested in setting up a file/media server with an ubuntu derivative like linux mint here’s how.
firewall
the one i use is smoothwall — a security-hardened linux distro for use as a dedicated firewall. on installation, this distro will wipe the whole drive for its own use so be careful with this one.
i prefer running the firewall in its own machine for safety and security reasons. should it be compromised, then that unit will be the only one compromised. so far, i’ve been running three units in three different locations for around 3 years now without any of them being compromised.
expensive harware is not really needed. in fact, all of the firewall installations i mentioned above uses a pentium 3 with around 256 meg of ram and a 10 to 40 gig hard disk. if you have more than 25 units behind the firewall, then you should probably go up to a pentium 4 but as with everything else, the more the memory the better.
things get a little more complicated 
from here.
web server
this is easy enough to set up — you just need a linux distro and the apache http server. its up to you if you want to use it as a public web server hosting your pages or a web server for your intranet. there are specific instructions pertaining to security if you decide to use it either as a public or private server.
database server
most of the websites you visit on the net these days have a web app with a database backend. this blog has a database backend — mysql to be more precise. if you’re planning on using these applications at home or at work then you should be prepared to have a database server.
you can run the database server in the same machine as your web server but i’d recommend that only within an intranet. in publicly available websites with a database backend, the database server should/must be in a separate machine or you’re asking for big trouble.
hardware requirements gets steeper as configurations get more complicated. you’d need more processing power with more memory and plenty of hard disk space.
