Actually in my experience windows xp/2000 should install on it just fine. Pentium II. It will run pretty horribly but you can tweak it to run decent. I used to create XP images for Pentium I 166mhz. They were dells however, using older intel boards. Now they ran horribly but where I worked at that time it's all they had in some places. I was able to tweak it and turn off enough that it actually worked ok. What you can try is start the install on another PC. When it gets to the first reboot where it detects plug-n-play hardware, put it back into the old PC. This may get you to the right spot. Can't guarentee that this will work but I have done alot before.

As far as using it as a server, IMO that's not the best idea for that system. Depends on what kind of server I guess.

During the install, what error specifically do you get if any? I'm sure it's hardware related. If you have another video card you may want to try that as well. If you can find any kind of bios update for that board, that may be required as well.