Though not in an educational environment, we recently had to install a new data center for my organization on an extremely low budget.
We chose Linux for our initial DMZ firewall, and for our web and DNS servers. Like you, software cost was a deciding factor, but using Linux allowed us to scrape up a number of old and second hand PCs that couldn’t even be considered as Windows 2000 Server candidates.
So far it has been successful. Updates have been automatic, the machines though old, are running reliably. We use not only MRTG for traffic graphing but also Nagios for server monitoring.
People often talk about the Open Source benefits of Linux, which is certainly true, but there is another factor that we often overlook. I think that a key advantage of Linux over Windows is that you can turn the GUI interface totally off. This allows the CPU to dedicate its time to the main functions of the server. The lower overhead means older, cheaper systems can be used and in some cases with better performance than a newer Windows system.
This may be a major consideration in a school where funds are either tight, or the approval process to purchase new equipment is long.
We’re using RedHat 9 even though we knew it was near the end of its support life as Fedora Core seemed to have been a little too unstable at the time. I’ve since installed Fedora and used the most recent updates using “yum” and it seems to work well.
I’m sure other distributions would have worked well, but we stuck with the evil we knew.
Linux Kickstart may be something you may want to consider using if you need your students to install Linux quickly or on many machines.