After choosing the computer you're going to use, your next decision is deciding what OS (Operating System) you are going to run on your web server. 
Your choices are pretty much Windows or Linux and there's many different flavors of both.

In this article, I'm going to compare the differences (that I know of  from experience) between using Linux or using Windows.  Both have their pros and cons, so I'll do my best to outline those here to hopefully help you decide.

WINDOWS

I personally started my server off with Windows, because it's user interface's familiarity made it easier to focus on the server software and not on trying to figure out the operating system as well and wondering if it's the OS causing me problems or the server software. 
XP is probably the best choice due to it's low system demands and the fact it's easily availabe on most older PCs already.  It's also the most common platform still used today, despite all of the people using Vista.  So therefore, support is easy to find since there's so many people using it.

Vista on the other hand isn't my first choice for a server software.  I personally prefer Vista on my desktop PC because of it's usability and stability I've experienced while using it, but it's got a heavy footprint and is a resource HOG.  Idling it usually uses around 800MB-1GB of RAM and won't run on many older systems.

I did have my first server running on Windows Server 2003 and it did pretty good.  I didn't use the IIS server, but instead I used Apache.  I've heard IIS users like it, so more power to them.  I'm an Apache fan myself.

LINUX UBUNTU

I currently am running Ubuntu on my web server and I feel converting my server from Windows to Ubuntu was the best choice I could've made.  It was very frustrating at first because I had no one to tell me how to even begin using it, let alone start running a web server on it.  The GUI looked simple and straight forward, but how the heck was I going to get Apache, PHP, MySQL running on it?  I didn't know where to begin!

But once I got familiar with it, the support is far superior than Windows and best of all, Ubuntu is FREE!  There's so many apps you can download and use free of charge too, but we're talking about a server, not a daily-use PC.  A lot of the apps you will more than likely find yourself wanting to use on your server are designed to only work on Linux machines, keep that in mind. 
Ubuntu is also open source, so if you need to change something, you can get the source code.  That's way over my head though.

PROS AND CONS

Linux
There are many reasons to use Linux,, but it also has some drawbacks.

Pros:

• Linux offers a more stable, compatible, and secure server platform.
• Most versions (distros) are free!
• Linux isn't prone to viruses like Windows.
• It can be ran without a GUI, which reduces the resource requirements of the OS.
• Linux is very structured for server use.
• Support for it is very easy to find and there's an abundance of information online.
• It's more secure in many ways compared to Windows.
• More web apps are compatible with Linux that aren't compatible with Windows.
• It's Open Source!

Cons:

• Linux has a learning curve for Windows native users.
• Linux depends heavily on using the command prompt, which users must learn the commands.
• Linux uses file/directory permissions and can be frustrating to new users.
• It's filing structure is different than Windows, so it takes getting use to.

Windows
I think the reasons for using Windows are pretty obvious; ease of use.

Pros:

• Most users are familiar with the Windows interface.
• Most computers have Windows already installed on them.
• Windows can be easier to use since file permissions don't apply.
• There's not a need for managing things via a command prompt.

Cons:

• Windows isn't free.
• Windows isn't as secure and more vulnerable to attacks.\
• Many web software apps aren't compatible with Windows servers.
• Windows can be more unstable.
• Windows is more prone to viruses.
• Support for Windows usually costs money.

I highly recommend starting new dedicated servers off by reformatting the hard drive, then doing a fresh new install of the OS.

SUMMARY

Really it comes down to what you're going to be using your server for and a matter of preference.  Considering I didn't have any good references for starting to build my own web server, it was easier for me to start with Windows (since I already knew a good deal about Windows) and then learn from there.

Once I had a pretty good grasp on how Apache 2, PHP, and MySQL all worked together as a server environment, I decided to investigate Ubuntu and see what were the advantages of using it over Windows.  I continued to see a large number of Apache users that were running Linux instead of Windows and I began to see why it would be better.  Once I learned it, I quickly switched my own server over because the advantages were just that much better.

I had made my server public and it was hosting this website for the first several months and security became the focal point of my server.  There was a huge gain in security just by going from Windows to Linux without any extra steps.  Maintenance was easier too, such as updating, etc.  The stability factor was probably what stood out the most to me. 
My server ran flawlessly 24/7 for several months without anything connected to it such as a monitor, keyboard, or mouse.  That was so valuable to me in terms of a server.

So really it just depends on what you're doing with it.  It's not too difficult to convert it later if you decide the other is better.

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