Good advice above.
From a server perspective, Time Machine is ONLY good for helping with the 'oops, I deleted a file I didn't intend to' issue. It is NOT NOT NOT a full-spectrum backup tool, and you'd be in for a HORRIBLE surprise if you used it that way.
IMHO, if you're going to the trouble of running a server, you have needs sufficient to warrant setting up a multi-layered backup program.
My former Xserve setup used the following. Two internal drives configured into a Raid 1 mirror, with the idea that a dead drive would result in zero downtime (which wasn't quite true - when one drive died, I needed to shut down the computer, remove the drive, and start back up - 5 mins downtime). One larger internal drive configured into three partitions, each large enough to hold the main drive's contents. One was a scratch partition, and the other two were destinations for SuperDuper backups. One ran automatically at 7pm each day, to capture the day's work. The other ran every week on Friday at 9pm, so I'd have a several-day old backup most of the time. Finally, I had an external Firewire/USB drive, and ran a SuperDuper backup each day right after lunch. This drive went home with me at the end of the day to provide an off-site backup with day-old contents.
This gave me a pretty good set of backups - protection against drive failures, a hot backup with yesterday's end of day data, and a mostly-offsite backup with yesterday's mid-day data.
But... even with that level of backup, there's several gaps. My off-site backup was onsite all day, making it vulnerable to theft, flood, fire, etc., along with the primary. I didn't have a backup more than a week old anywhere, and i wasn't using Time Machine for iterated backup of files.
A reasonably complete backup plan would have added two more external drives for the off-site cycle, so I was alternating days with two drives, leaving one offsite at all times, and the other going in only every other or every third week, so I had an older copy offsite as well, as well as giving Time Machine space on the internal backup drive, so I had onboard file recovery.
Now, the sane person says, 'what a giant pain! do I really need a mirrored pair, a really big onboard drive with three or four partitions, and THREE external drives to cover backup duties?'
What's your data worth? What happens if you lose it? Can I be down for an hour? a day? a week? Can I afford to lose a day's data? how 'bout a week? For some businesses/organizations, it'd be trivial. For others, being down for a couple days and losing a week's transactions would be the end of the business.
What happens if there's a disaster, and the fire sprinkler goes off right over your server? That might well kill your mirror, onboard drive, and external daily backup drive all at once. Earthquake/Flood/Storm? Break in at night and all the hardware is stolen?
Lots of decisions to make... good luck!