Being a newbie is OK - we all were at one time
Lets get some definitions first so we all know what we are discussing
Server - this is a computer that stores and supplies (serves) files and data for other computers on the network
Network - a group of computers connected together over a communications system
Database - a database is a computer program that organizes and stores information. The database program allows the information to be searched, arranged and presented to the user through some type of programming language
SQL - Standard Query Language - a very common and popular programing language used with database programs.
Workstation - A computer used by an individual to do their assigned job.
Now that we have a common base to work from, let's answer some questions
Using the office server as a workstation is never a good idea. As you have seen, running programs that you use for your daily tasks can have unpredictable results, causing the server to fail in it's primary function, supplying files and data to the network
So yes - you need a separate computer to use as a file server
Do you need a database? - probably not. It sounds from your question that you currently store data files on the server and retrieve them as needed. Your company does not run internal applications that access a database. So a database is not required
Backing up your data can be done in a number of ways. Here are a few ideas
1. Get and external hard drive. Plug it into the server and copy all the server data files each night. Take the hard drive home. If the worst happens, you have a current copy
2. Back up to the web - there are many web based backup services (paid and free) store your data on the web each night. You can then retrieve it if needed
3. Install a second hard drive in the server. Copy all data files to the second hard drive each night.
There are programs that can automate the task of backing up your data. They range from simple to OMG!!! - Look for one that fits your needs. Do not think that bigger is better.
Servers - Computers that act as files servers (what you are talking about) for a small company do not have to be big expensive machines. 90% of the time they are just sitting there, waiting for someone to retrieve or save a file.
What they have to be is reliable. As you have found, using a Windows box as a file server is rather, well, annoying. If, for economic or technical reasons you must do this, remember to reboot the machine about every 3 days. Do not let the computer be used for other tasks, limit the computers' internet access to updates and run a current anti-virus program on the machine. It can work, maybe not well, but it can work.
A better approach would be to take the box you have decided to be a server and reload it with Linux. Linux is a far superior OS for servers and gives you a lot of advantages over Windows:
1. It is stable. My home server has run for 6 months at a time without a reboot
2. It is secure. 98% of all viruses and malware are written for Windows machines. They will not run on a Linux box. Add to that that Linux, from the ground up, is designed to be a more secure OS and you are starting with a very secure system compared to Windows.
3. The price is right. Windows is a commercial product. MS wants it's money and is very unfriendly to those who do not step up to the cash register, checkbook in hand
Linux is open source. It is freely (and legally) available to all. Everything you need to set up an office file server is available for download from the web.
So my distro of choice for an office file server would be OpenSuse from Novell.
You download the .iso image (a CD image) and use your CD burner to create an Installation CD
You boot the computer from the CD and install the new OS
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DANGER DANGER - DANGER WILL ROBINSON
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Installing a new OS wipes the hard Drive SLICK
DO NOT do this on your current office server until you have made 2 (yes 2) confirmed good copies of all office files
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I recommend you use the entire disk and wipe out the Windows install on the machine. You will not be needing it again
During the setup accept the default prompts for most the questions. But be sure to select server when asked what the computer will be used for. That will load the necessary software
Once the installation is done, use YAST (the configuration tool - like Control Panel in Windows) to configure SAMBA, the file server software
SAMBA makes the Linux machine appear as a Windows file server to the rest of the network. Samba can be a bit of a pain to configure, which is why I recommend OpenSuse. They have the best configuration tools I have found. But it still is a bit of a challenge. Expect to spend some time searching and finding answers. Do not expect to get this done in an afternoon while sipping on a brew. It won't happen. (not the first time anyway)
But by time you are done, you will have a reliable office server, and you will no longer be a newbie
(why answers cut off the end of my message I don't know - we'll try again)