The first place to start looking is your network topology: what is your backbone connection to the WAN (Internet) and your internal LAN configuration?
Serving multiple sites to the WAN is not a problem providing that you have sufficient outbound bandwidth to serve the connections without bandwidth choking. A few (2-10) sites with low loads (requests) can be served through business-class DSL or cable; beyond that, start looking at T1 or better backbones.
Internally, in this day and age, having Gigabit Ethernet backbone is almost the standard; 100BaseT is okay.
Server-wise, your box is getting aged and newer hardware is going to give you better performance as well as software compatibility. Spreading services load (DNS, Web, Email, OpenDirectory) across two or more servers will keep one box from lagging on requests.
Lion Server is capable of serving your needs - a couple of Mini's w/Lion Server could work - but I'd also suggest you examine other hardware and OS (like Ubuntu Server) as also viable options.
I understand the desire to move things internally. You gain the benefits you mentioned. But you also become responsible for security and backup of all your sites, files and systems. Look long before you make the move - it requires research, planning and dedication to take on being a full-on SysAdmin..