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My preferred Linux operating system is CentOS, a derivative of the commercial RedHat Enterprise Linux. It gives a RedHat-style distro with stability and an active support community. CentOS is a much better choice for a server than a bleeding edge distro such as Fedora.

A nice distro to use for a server is CentOS. It's built upon Redhat Enterprise Linux so it provides a "Redhat" style distro while being stable and well-tested. A more "cutting-edge" distro such as Ubuntu or Fedora isn't stable enough for practical use as a server – too many updates being regularly pushed out.

Alternative - Scientific Linux

Base Installation
ISO's for both CentOS 5 and CentOS 4 are available.

There is a "server" ISO available for CentOS 4 that has the minimal packages required for a server-type install that doesn't include stuff like a desktop environment like KDE or GNOME. This was the version that I was using for my server guides until April 2008. Configuration is pretty straightforward but when it got to the package selection, I would choose the "minimal" option.

CentOS 5 doesn't have a server ISO, but if you deselect pretty much all the packages, you only need CDs 1 and 2.

Basic Install Options
Disable SELinux. Todo: is this really necessary?

Post Install

Once you have your base installation done, have rebooted the computer and logged in, use the YUM package manager to update the currently installed packages:

yum -y update

Update from CentOS 4 to Centos 5
http://wiki.centos.org/HowTos/MigrationGuide/ServerCD_4.4_to_5
http://wiki.centos.org/Migration/5

.......

Long story short, just do a fresh install of CentOS 5!