well, yes it depends on what exactly you are doing, i dont know if you are having i/o intensive stuff .. but if its basically an app server .. this is what i run at one of my jobs ( a school)
Win2000 domain, 1 Server, 10 clients,
Server= Dell Poweredge 1300, p3 600 (smp capable but not enabled), 640mb
this server is pretty slow (stress *slow*), and it serves the network fine (whence we got the 100mbit switch), and it serves all the courseware software from the server ..
well hope this helps ..
-neural