Unless you have some pretty serious requirements(my off-the-cuff guess is that you don't) an Xserve(or any other serious 1U dedicated server box) isn't a terribly wonderful idea. For example, even the bottom of the barrel Xserve is a $3,000 2GHz G5 with a Gig of ram and dual GBe but only 80 gigs of HDD space(and additional modules are rather pricey). As mentioned above, Xserves play nice with Macs, and do much better than they used to with PCs(though no better than *nix, to the best of my knowledge). Now, if you need serious power, the prospect of a dual 2.3 GHz UNIX box that fits in 1U with 5.6 terabytes of Fibre channel storage attached is pretty attractive( and for only $17,000, no less).
Now, I don't mean to be insulting in any way, but from your question I would guess that you don't need kit like that. I'll assume that you are, rather, the typical high end home/smallish office user who wants some fairly capacious networked shares, possibly a mail server, and maybe some basic web/ftp stuff. None of that requires serious processing power, and if you only need a few, tower cases are easier than 1U boxes any day(and much, much, much quieter).
Further details on your situation may change this picture somewhat(so please do provide them); but I would suggest the following to you: If you want to stick with Macs for this job, grab a G4 tower(or maybe a low end G5 tower) and a copy of OSX server(if you need it, I don't know exactly how crippled OSX standard is out of the box) and a few extra disk drives if you need the space. You'll get the same software experience and save a bundle.
My personal preference(a bit of an x86/*nix enthusiast on the server side) would be to take a look at the low to midrange server offerings from Dell or similar(
http://h18004.www1.hp.com/products/servers/platforms/index-ml-entry.html or
http://www1.us.dell.com/content/product...trageous_servers?c=us&cs=04&l=en&s=bsd among others). These are quite cheap, and fast enough for most any small scale server tasks(anyone doing gene sequencing, or data mining or whatever in their basement, I'm not talking to you), and are quite easy to live with, store, and add drives to. Linux based server packages are suprisingly easy to configure these days, so you won't even need to pay for an OS, unless you want to do Active directory, or similar Windows Server stuff.
I hope this helped a bit, and please do give us more details about what exactly you want to do.
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