Separate servers or just one?
 

I want to setup a DNS, Mail, and Webserver. Would running these all on the same machine cause any problems, or do you recommend separate machines? Also, I know I want mail and web to be in the DMZ, but should DNS be there as well? The PC I plan on using is a 933MHz P3 w/ 256MB RAM, and SuSE Linux 10.

How many people will this be serving? While this may be great for a small organization, it would get slaughtered in a place like HP or IBM.

You can stick DNS in a DMZ no problem; you can tell it where to accept connections and queries from and it shouldn't be an issue really.

It will be serving a vocational school with around 100 or so computers at first.

You could probably put DNS and another server together and it would be okay. You can probably get away with all three on the same box quite easily, to be honest. Just make sure they're all running securely.

Thats good to hear. We are planning on eventually expanding to the whole school, which would be around 500 users. Would that be pushing it? What is a reasonable limit?

Depends on how it'll be hit. If all 500 users want to hammer your webserver and mail at the same time, you could be up for issues. But chances are, they won't. If you can find a cheaper box to offload one server to (be it mail or web), that would probably be okay.