I ran a debian system, Samba, rsyncd, ssh, postfix, netatalk(apple file services), munin, MySQL, Apache, Lighttthp, and Asterisk 1.4 and FreePBX on a Buffalo NAS with 128 meg ram - it can be done (with some swap usage) - you can configure those various services to use much smaller memory footprints (google it up)
Lighttp is much smaller footprint and can be used in place of apache with freepbx.
If you really get efficient, while its alot of work, building things with compile time memory usage flags and ....building with ulibc libraries can really shrink things down - as that and busybox are common ways to build thinks like linux router firmware....but its alot more work.
The sheevaplug appealed to me because im lazy, and i could build a easy to use and add/hack/extend system for users without all that extra work I just suggested above - all the advantages of an embedded low power platform, with tons of ram/flash so I could be a lazy pig and build it desktop server style
