Neil,
I'm going to make it difficult for you now and disagree with BA. :) (This won't be the last time you're offered conflicting advice btw)
Yes, virtualisation has its merits - snapshotting being very high on the list and useful in experimentation, and portability of clients between hosts another.
The downsides: At least two operating systems to admin and maintain and less efficient (more ram/cpu/hdd needed for the same bang). It's also another technology to learn with its own complexities and mistakes to make, and on top of learning the server side of things it's unnecessary. You can learn it later and get more performance out of your hardware for less money in the meantime. (Also, I could probably make a reasonable case that running a host on a client wastes more electricity, since there is more cpu required to do the same thing so it steps up more often. In reality, this wouldn't amount to more than a quid or two a year.)
For a simple home server, I really don't think it's needed, unless you plan on doing something unusual.
