Thats good to know. Im building a machine that can handle windows 7. Ubuntu GUI shouldnt be a big deal, should it?Unfortunately, most server cases will eat up your budget with the case alone. I understand the attraction of building a super-cheap budget system. There is a real challenge to it, and it's especially satisfying to actually pull it off. This challenge was what drove me to assemble my own super-cheap system so long ago.
A few general observations, and then we had better get on to Ubuntu -- after all, it's supposed to be a beginners' forum and not about hardware.
Your problems may be due to nothing more than a wonky disk. It is very advisable to run a disk diagnostic utility on each disk that you intend to use on your future file server.
If you stick with low price PC cases, choose a case with plenty of HD slots and then populate only every other slot. This will give them room for air circulation. Then, before spending a penny on any component, Google each component with a query along the lines of: "Is [component] compatible with Linux?"
Now, the Linux discussion:
A super-cheap budget system doesn't need a powerful processor, motherboard, video card or sound subsystem. And since this is not an enterprise server, it doesn't need much memory, a killer I/O subsystem or redundant power supply either. Keep in mind that such a system will commit suicide if any single component fails but, hey, you know that going in.
The good news is that, conceptually, your project can be done on a super tight budget. However (there's always a "however"), the Linux side is more challenging, and this is not because of Linux itself (which is more than up to the task) but because of the learning curve for new users. The problem with a bare bones base system is that it will choke to death on the overhead of a graphical interface. This is one of the reasons why Ubuntu Server Edition does not come with a GUI. But the Linux command line interface is so obscure and intimidating to new users that it sets new users, no matter how dedicated and well-meaning, up for failure. At least, this was my initial experience trying to do what you're doing.
My best advice is as follows: before spending a dime on anything, turn your existing system into a pure linux box now. As is. No dual boot, no Windows safety net, no wussing out. You mention that you have two other computers, so I'm assuming that you can install Linux on this machine that you were planning to convert anyway. This is your school. Your Linux University. Your Linux Temple. As such, you will not allow yourself to fall back to the GUI. You will open up terminal with every session and you will experiment, explore and fix your inevitable mistakes using nothing but the command line.
A good book about the command line interface can be found here:
The PDF is free to download, and it covers almost everything you will need to know to get started managing your server.
A few weeks of butting your head against the Linux command line in your spare time will provide you with priceless data, mostly about yourself. If you find that you cannot get your head wrapped around the commands in the book (which progress from basic to intermediate), then running an ultra-cheap Linux server is not realistic. At that point, you will have to increase your budget and build a machine that can run a GUI-based server. You may even decide to stick with Windows, but the point is: you will know. And you will not have spent a dime to get there.
I only have two machines, both dual boot mac/windows 7 for that elusive tool for android or game. I would be building a basic system from the ground up. See the shopping list above.
Yes, I need to go through said list and make sure its compatible with linux. Got it! Thanks!