How much power do I need???

I want to setup an Xserve to provide storage and services to 3 to 5 Final Cut Pro users. If they are just uploading the video files to local storage for editing, not editing directly from the server files, can I get away with a G4 Xserve so I don't run into a bottleneck. I know faster is better but cost is a factor here. All the footage is DV quality (3.5MB/s).

Also, do all of the systems connected to the Xserve need to be the same version or can I mix 10.3 with 10.4 or even 10.5?

Thanks a lot,