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Mar 20, 2014 8:17 PM in response to Stacey Kunchby Elite Expert of all Knowledge,Yes. You will require at least the minimum supported OS. 10.7 or higher will be ok on (I think) all intel Xserves.
However, the server OS and regular OS are pretty much the same thing except for the extra features. The Xserve would come with license to run whichever Server OS it shipped with, so if that's good enough, then use that. I am not aware of any compatibility issues with running software on Server instead of regular. If you don't start any services, then you're not really losing anything.