I use OS X Server 10.1 AND 10.2.
10.1 is OK, but if you need to use it in a mixed environment (Windoze...), I must recommend OS X Server 10.2.6.
Management of the server is quite different in 10.2 Server than 10.1. 10.1 looks very much like AppleShare IP 6.3 when it comes to (remote) management.
10.2 Server has more options, which are quite necessary if you offer (for example) SMB sharing.
Changing the default permissions (inherit from parent, or apply as you describe) actually work! NOTE: all work since 10.2.6 Server. 10.2.5 and lower are a bit unpredictable...
If you want to netboot OS X clients, you'll have to use 10.2 Server aswell. Also the printing mechanism is a little better....
So, if you use OS X Server for AFP services only, 10.1 is good enough.
If you want to do more, use 10.2.6 Server. It's actually very good!
EDIT: <i forgot alot!>
Also if you want to have a working NetInfo parent on the Server, use 10.2.6.
If you want to use a good password server, use 10.2.6.
If you want to be an LDAP server, use 10.2.6.
Placing someone's home directory on a network volume.... 10.2.6.
I probably forgot more....
Some of these things maybe "possible" on 10.1 Server, but on 10.2.6 Server they actually work, and it is also very stable! (I should be selling them....
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