Hi Nightsky:
Considerations for OS are aplenty. some factors that you should really research are:
(a) Load number of clients you might serve up
(b) hardware you have
(c) $$ you wish to spend
(d) Server machine load vis, is this a standalone webserver or is it going to run more stuff?
(e)
S E C U R I T Y
(f) feature you wish to include: databases, scripting support - say Java, PHP, etc etc to name a few
(g) Level of expertise of the people you are hosting out to .. cant expect M$ users to understand anything but..
These are just some considerations.
Based on this, my recommendation that give it a 5 star rating on all of the above are:
- BSD [FreeBSD] for the OS -its free, its secure, its better than sliced bread for servers
- Linux for the OS -its free, its secure, its almost as good as BSD for servers; why I would rate it lower than BSD is simply cos u have to be careful with the amt of crap Linux now ships with, if you can install it well then this is great esp. considering a lot more h/w support
and of course your daemon is Apache and nothing but

Add in PHP and mysql and then watch it rock!!!
HTH