About Linux
I am a long-time user of Linux on the desktop and on servers. In the field of server operating systems Linux is adopted widely. In many situations it is one of the best choices available (if not the best). Its use as a desktop operating system, however, is still limited to a few people. The main obstacle is that some Windows programs do not run on Linux. For most of these applications there exist alternative solutions. But some exceptions still prevail, e.g. Adobe Acrobat (although Adobe Acrobat reader works well on Linux) and Photoshop. Ironically, I more often experience the reverse problem: Many tools available under Linux, are not available on Windows or usability is very bad compared to Linux.
Desktops
For many users - including me - Linux has been ready for the desktop for quite some time. In case you would like to give it a try yourself, you can e.g. simply go to to openSUSE, and download the distribution (if you decide to buy the boxed version, you will additionally get installation support). If you hesitate to install it on your system right away, you might only try the live CD (but beware that the speed of a live CD is of course much slower compared to an installed version).
I have chosen openSUSE as my preferred desktop Linux distribution, because it usually just works out of the box (no or little need to tweak it after installation). It can be configured entirely via a GUI configuration tool (YaST), its desktop is very polished, and the included programs are very well integrated with each other.
Previously I have used other Linux distributions like Mandrivalinux, Gentoo, Ubuntu Linux, Debian, and Linux From Scratch. All of these distribution have their own merits and shortcomings. If you have too much time to spend/waste, you can try to find the distribution, which matches best your own preferences.
Servers
Prerequisites for server operating systems are usually quite different from desktop use. This is why I would recommend to take into account a different set of Linux distributions for these tasks. Most of the time security issues are a lot more relevant for servers, and the willingness to upgrade a working system is typically very low (upgrading tends to mess up already working systems quite a bit - even if you are using Debian :). For professional use it is probably a good idea to choose one of the enterprise products of redhat or Novell. For private users their pricing is usually rendering their offers out of the scope.
A cheap (read: free like in beer) alternative is CentOS. It is simply a clone of a prominent North American Enterprise Linux vendor's enterprise distribution (mentioned above). This ensures very high stability, long support periods, etc., but comes only with community support. This server is running CentOS since 2006, and I am very impressed by the quality of this distribution.