Well.. that is a great little project... It really comes down to your comfort level of computers.. If you are willing to spend the time and really learn what is going on.. Or do you want something that you can just throw up and say there it is done..
With a 550MHz machine SuSE will run fine on it. You can enable SAMBA, the most accepted network file sharing utility, and you will have a rock solid network share. Cost.. little to nothing.. You dont really need a KVM switch as SuSE has a remote desktop app built in if you install KDE or Gnome. So you can point your web browser to the correct port, I think it is 5201.. and you have a graphic view of what it going on with the box..
As far as the difficulty.. It isnt to hard to get up and running.. SAMBA ships with SWAT the web interface for setting up shares. It is just a matter of adding users to the shares. From there you are going to want to map the folders as drives to the host machines. Again not too hard but can be tricky depending on how long it takes for windows see the linux box on your work group.
I know of a few Linux variants that offer file sharing suites.. I will post them a bit later as I am not on my personal machine.
As far as going with Windows XP for this solution.. I would try to stay away if at all possible. I have had good experiences with trying to do this on XP and then I have had ones where it never works. If you want to spend a few $ you can get Server 2003... With would allow you to create a domain and do all of the fancy things that companies do..
I currently have a SuSE 10.2 server sitting in IL acting as a file server for my parents.. I more performs backups now... If you have any questions feel free to ask..
@Shug.. Linux all the way baby
