@linuxnewbie2012: This thread has gotten a little off topic, though humorous, hopefully the posts give you some information about how Linux networking is superior to Windows. I think that a lot of this has to do with the fact that much of current network design was done on Unix and BSD systems with Windows porting it after the fact. Consequently, networking is something that is natively built into Linux, which inherited from these platforms. In Linux it is possible, if not common, to run remote resources such as parts of the file system or a display via a network connection and they will operate as though they were part of the local machine.
In answer to your original question:
What is needed for my Linux network to achieve this? I don't think we need a DNS server for a LAN, do we? A DHCP is also unnecessary, isn't it?
Very little is needed. As was previously mentioned if you wish to integrate with Windows systems you will want to use a package called Samba. This brings SMB capability along with netbios and winbind. Samba will allow you to join a Linux PC to a domain or even run a primary domain controller on a Linux system. Combine this with LDAP and Kerberos and you will have a very powerful centralized authentication system for your network, capable of handling hundreds, if not thousands of users.
You can certainly run a DNS server and a DHCP server if you choose. Ultimately to connect to a LAN, the machines must have an address which they can by configured with statically or dynamically via DHCP. Similarly, somewhere on your network you will need a DNS server to resolve between names and IP addresses, but you can also use your ISP's DNS and/or free ones like Google's public DNS. Of course these won't resolve your LAN addresses which is a feature that is actually relatively easy to setup and configure. You can even have your hosts dynamically assigned addresses by DHCP and have the DNS automatically update the forward and reverse zone information. Any Linux distribution is capable of installing these applications. There is no magical "server" edition like there is in Windows. You will see references to server builds, but these aren't strictly necessary and typically remove features like graphical interfaces. In some ways Linux will be similar to Windows in this manner in that you simply install the applications, much like install the modules into your server manager.
Are there any other questions you have regarding Linux networking or anything that we can provide further clarification on?