We're using Debian as a small provider. Actually we're using four webservers — two of them run Debian etch, another one runs Debian sarge and the oldest still runs SUSE — this will be changed to Debian in the near future.
Our department also runs a local network server and a testing environment on Debian sarge. The testing server is running on a 450 MHz machine and it's working great and fast! Our reason for using Debian is the perfect support, stability, performance and great package management.