I've run XP with 256MB, and I couldn't tell the difference between that and the 512 or 384MB's I have in my PC's (see sig for details). If you have at least that, which you do, I would suggest that for speed and the compatibility.
I'd go with just about everything syngod just posted, but I do feel that the server state would be better served with Win2k, as it's got more of it's issues resolved and has been out for a few years. Just my personal opinion though.:)