Teh Current Server is:
Core2Quad Q6600 running at 3Ghz.
6GB of RAM, 3GB reserved for the Java server.
Windows 7 ultimate.
The unofficial Hey0 mod that works with the new server version.
I've never managed to get monsters to work reliably on the server, although I've not really tried with just local LAN players. I really don't know if it's inefficient/bad code that slows it down or just raw Bandwidth - there is a /shitload/ of data that is constantly going out to the clients, even moreso with mobs turned on.
There really shouldn't be any need for such a (relatively) high spec machine to run the server, and hopefully it will get better with the next version.
Notch stated somewhere that he was going to change the single player setup so you're actually playing on a local, same machine server. Hopefully this also means that server code will be vastly improved in the process.
No harm in trying out a server locally, go for it and you might be pleasantly surprised if you're playing on a LAN.
EDIT: I also use Backup Plugin (from HMod Wiki pllugins page) and the mapping program is called MC Map, can't remember where that's from though :D
EDITED: 17 Feb 2011 16:21 by KOSWIX