If you will store large files on the server and working with them then you should really upgrade to 1000Base-T. If you put into your Xserve an network card I think there are two ports on these card then think of making a link aggregation. This means that if two clients are accessing the server simultaneously both of them will get a separate 1000-connection thus speeding up network transfer considerably. Further you get some redundancy into your setup.
This redundancy would be good for your hard disks too. Though you would need the raid card that apple provides. For big files a RAID 0 would be the best thing to make things faster but it’s risky. You should make often backups of your data in this case. Oh and have a spare drive lying around to quickly replace a failed drive to get your system back up and running.
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