Not too sure if you will see this as you posted over a month ago but I have installed l!nux on the XBOX and setup a cluster.
I used older XBOX's (1.0 - 1.5) which can be TSOP'ed (2 carefully placed blobs of conductive paint on the motherboard and a hacked 007AUF (raincoat with cromwell bios) game save later) and I installed GENTOOX. You can then connect via the WEBMIN page via your browser and configure everything.
If you don't want to TSOP (which you really should at least look at or I will be happy to send you the best guide with all the junk taken out) then you could softmod the console and run the cromwell bios from a loader like phoenix bios loader MeeToo (PBL MeeToo).
Hope that helps a little, I can't really say much about running a server for what you want but the XBOX only has 64mb RAM as standard so you may need to cluster 2 XBOX's to get what you want from it. It's a good project and they could also run other stuff like a NAS server (remove the un-needed DVD-ROM from one of the machines in the cluster and replace with a large HDD), Web server, FTP server, Bit torrent server/client and many other things like that. Most of which are already built in to the Gentoox installation.
I'm no Linux wiz and I manged to do it, I had been softmodding/TSOP'ing XBOX's for 8 years though so it made things simpler.
Hope some of that was of some help.
Cheers
Oli
