ubuntu or debian ?

In a nutshell!

Debian is a less Graphically enhanced OS whereas Ubuntu has the bells n whistles added to it to make it look similar to other big OS's

Functionality wise, i think Ubuntu may have edge on speed and capability, purely due to the support and updates/evolvement of Ubuntu system!

I personally found Debian easier to use than Ubuntu, but horses for courses.

Ubuntu offers a streamline no GUI just dos like commands, which is lightweight but can be it bit confusing to beginners as its all code/command based

Debian simple GUI is less resourceful then Ubuntu GUI

So dependent on your knowledge (level) of technical nowse, also the speed of the machine you wish to add the Linux OS to! may effect which one you choose!

Either or the Jobs gets done!

To setup a server use ubuntu server 12.04 lts, run it headless so you dont have any gfx taking resources, a desktop is not needed to run any type of server,
also most of the packages you need for the server are optimized for ubuntu,
debian can be more difficult to track down missing dependencies etc