Apple briefly stole the spotlight from CES (the international Consumer Electronic Show in Las Vegas) again this year, although not to the extent it did last year by announcing the iPhone. This time around the announcement was about an update to the Mac Pro model which now features as standard equipment dual Intel Xeon quad core processors which adds up to 8 CPU cores. This is a whopping amount of power for a desktop tower computer. However, it is a large tower and you would need a large desktop. It is probably more suitable for the floor. Dual quad core processors have so far been regulated to servers for Windows PC's.
In addition to the increased CPU power you can now slide up to 4 terabytes of storage in four drive bays. There is also an option for the NVIDIA Quadro FX 5600 with 1.5GB of graphics memory for an additional $2,850 - slightly more than the recommended configuration of the Mac Pro.
This is a machine designed to do some heavy computational lifting including high definition video rendering and encoding and is overkill for most folks.
At the same time Apple updated the Xserve with the same dual quad core cpu's which is targeted to small and medium businesses, however for the small businesses of under 10 people in a office the new Xserve would be overkill unless your small business involves decoding DNA, video broadcasting, digital animation or similar tasks. Many small business need a server than can store office documents, connect to a printer and maybe host a web site and act as a mail server.
So, instead of the Xserve or Mac Pro I suggest you consider the Mac Mini as a possible server. You'll have to add an external firewire drive or two, but over-wise it could handle the job and you would not even need to install server version of Mac OS X which cost $499 for the 10 user license. The standard version of Mac OS X can easily handle many of your basic server needs.
The Mini consumes very little of everything: space, power and the knowledge needed to run it. Would a Mac mini be reliable enough? It does not have redundant power supplies or hardware RAID, but then again it costs much less, so much less that you could by two Mac Minis, one as a back up of the other - a Mac Mini cluster. Some web hosting companies are offering co-location services using Mac Mini's, such as, Macminicolo which would attest to it's reliability. There are instructions for setting up your Mac Mini as a web/mail server. Another blog, Nerd Vittles, boast 50 projects centered around the Mac Mini.
Here is a nice example of Mac Mini server setup on the top shelf of a closet in a home office:
For the external firewire drives I would consider the models from Newertech which are the same dimensions as the Mac Mini and feature additional Firewire and USB ports for daisy chaining additional drives or connecting other accessories.