I have been thinking about creating a very low power server for my home and business.
I am thinking of creating a dual core atom based computer with no HDD and no CD ROM with 1 GB of RAM and a wireless Internet adapter because it will only use around 35 watts and be very quiet.
I plan on using either Puppy Linux for speed if possible or Ubuntu Linux Remix booted from an external 650 GB HDD
I am using an external HDD due to the ability to use larger capacity and ease to upgrade in the future.
Using SMB, Hiawatha or Apache, as the server software.
I will use a VNC service to access the server (after initial installation) instead of setting up a monitor and keyboard.

Now why am I doing this. I wish to be able to use the fax machine from anywhere in my home and be able to access it when I am away from home. I wish to be able to access my business files from anywhere I have internet access. Another reason for keeping the files on a removable HDD is if I was going somewhere I knew I wouldn't have internet access I could take all the files with me, as I am doing now.

I wish to set up my own web sites for my own personal use for both family and work. It will not be high traffic websites. I also would like to be able to set it up to backup my wife and my computers even if we were on the road and be able to access those backups anywhere.

Stream music to the family xbox 360 setup on our entrainment center

I do not think I need a powerful computer for this but, since it will always be on, I do think I need a very conservative power using platform.

I do not want to play games on it or stream movies or any of those things.

The questions are will Puppy linux run on the Atom?
Should I use Apache or Hiawatha?
Any suggestions on what media server to use for streaming music to the 360?
Do I need more RAM?
Has anyone else created a setup using anything similar?
Any other suggestions?