I agree with most of the above.
For desktops, the most recent versions of Windows are pretty good. I wouldn't bother with XP Home, though; if you want XP go for XP Pro. There are a few flavors of Linux available for desktops, but I haven't tried any of them yet, so I can't comment on them.
For servers, the advantage of Windows is that you can get up and running very quickly even if you don't know 100% what you're doing. The disadvantage is that you can easily get into a lot of trouble if you don't know 100% what you're doing. Linux (and Unix in general) is not the world's most user-friendly OS, but it is powerful and arguably more secure.
IBM has started to push Linux, both for servers and desktops. (So much for OS/2
)