LinuxQuestions.org - Which Distro to choose for an Embedded Server?

Hello,

I have only ever used linux as a c/java/etc programming/development system. I know how the kernel/etc are organized and work from a computer engineer perspective, and all the general PC stuff like toying with processes, junk shell scripting, etc.

I have never been involved with embedded operating systems. My friend and I were developing something, and his solution to transmitting data from remote locations was to use a micro-computer loaded up with a light linux distro that would run an application (that I would write) to gather data from sensors we hooked up to it (i.e. temperature, engine rpm). I assume that we could save money by making an embedded OS instead? Am I wrong to think this?

Anyway, my questions are:
1. Since this system of ours needs to transmit data over a wireless connection, I was thinking about making it a server that would just display a web page with information (retrieved from our sensors) when you access its IP. What embedded linux distro would be best for this?

2. Would there be a better way for transmitting the information?

3. Or is a server/something that creates web pages/something that retrieves information too much for any available embedded linux distros?

And.. 4. If there is any general advice regarding embedded systems, as this would also be greatly appreciated. I am in computer (specifically mechatronics) engineering with a completed computer science minor: I think I could hack together an embedded something-a-rather but I really don't know where to start looking or if my ideas make any sense.

Thank you.