A computer is a computer is a computer.
As long as you have drivers for whatever hardware is in the system for the
OS you want to use - go for it.
You may have to integrate some drivers into your Windows XP Installation
media... Or use the F6 installation step or a variety of other things - but
all-in-all - it should work as long as drivers exist for Windows XP.
What do you mean by a "server type computer"? There's really no such thing.
A computer used for a server may be a bigger and faster one, but that's all.
If it's adequate for WIndows XP, then running XP on it is fine.