Currently I use an old laptop as a server. It is a Pentium 1, 166MHz, 80M ram with a 2G hard disk and a PCMCIA network adapter. I use it because:
it is fairly quiet, some fan noise
I assumed it would use less power than a desktop pc
I have a spare 333MHz Pentium II desktop system that I could also use. Thinking about power consumption, I decided to do some research. This article implies that there is not that much difference between a laptop and a desktop, given that the monitor is off (especially a laptop from that era: this Centrino laptop I am writing this on may be better). The article and this calculator tell me that it would cost about £60 a year to run a server 24/7 which seems expensive. I like having a server and if I'm going to have one I may as well have a powerful one.
Other random thoughts:
Each hard disk consumes about 25W: only need 1
Dedicated server pc should be stripped of audio, multiple video cards, USB peripherals and anything else that just burns watts.
Signing up for online hosting isn't much more expensive. Don't get root login power and kudos though.
Desktop systems are noisy. The server is an old AT motherboard, are quiet PSU's available for these? Hack quiet fans into the old case?

