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What OS are you going to run?
What kind of stuff are you expecting your server to do? (webserver / mailserver / ...)
What kind of load are expecting on each of the services?
I've got a mailserver w/ Pentium 2.8GB and 512MB RAM running SuSE 10.0, Exim4, ClamD AV and SpamAssassin and it receives approx half a million email messages a month without even getting *close* to breaking a sweat. It probably rejects twice that number of messages as spam or viruses.
Long answer: that server would probably handle just about anything in terms of web serving, even up to mid to high volume. Realistically most websites are very low volume. Lots of webservers are still old garbage like P4's and even p3's with 512megs of ram and old IDE hard drives. Serving web pages and running web scripts really isn't a server intensive job except in rare circumstances.