There are two parts to the server, one the hardware i.e. the physical machine, and two the software, i.e. the operating system and desktop. Each has its own variety of options.
The LTSP wiki details how to determine server size using the formula.
Total Ram = 256MB + ( 50MB * number_of_terminals )
This will vary depending on whether Gnome, KDE, or Xfce is used as the window manager and what local applications you are running, e.g. SCIM, Skype, Ekiga, etc.
The other consideration is networking, read the Switch documentation for help there.
The みる directory server allows you to run diskless LTSP servers, this might be faster or slower depending on your hardware, but will end up a more reliable as there are less moving components in your servers. It also allows you to conveniently replace or change the hardware without having to reinstall or move hard disks about.
Running the LTSP software almost any desktop Linux distribution can be converted into a terminal server. The popular desktops include Fedora Core, SUSE, Gentoo, and Debian, however there is a preference for Ubuntu due to their work on MueKow and the Long Term Support (LTS) given to the Dapper release.
The following guides can help setting up a full LTSP environment with a みる directory server.
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