SME 7.3 on Redhat is a good linux choice.
The set up and install is straight forward and all, but. I talked a newbee friend of mine into putting this on his HP proliant ML570. Dual Intel 2.8Ghz, 3GB Ram, & 100GB Raid 5 disks, 2 x 1GB NIC's.
He did not like it. He reformated and installed a different linux.
His problem was not the install, but how to make it do what he wanted. Using putty, and setting up a e commerce web site were beyond his tech capabilities.
I 've been using SME server for 10 years and to me it is perfect. But no OS is perfect. SME is perfect in my opinion because of all the packages that come preconfigures and already installed. About 100. SME won't do every thing to all people right out of the free iso down load, but it is good place to start. Everything can be added to it. Also it is Free!
If you want to put Drupal as a CMS , you can, with no problem. If you want to put Jumoola e-comm web site on it , you can . But you have to updare the PHP 5 to a newer version, MySQL and the Perl. But if you start out with a plain jane Redhat linux you have to do the same. Ubuntu is the same way. It is not exactly the way you want it when it is install at first. But you can add to it stuff , that will get the end result that you want.
The advertisements, do a yahoo search and find specific answers to specific questions.
best hardware, that is a personal opinon again. I say HP proliant server hardware.
Well supported on Linux, respected all over the world, many decades of support behind it. The same can be said of IBM and DELL. There are a lot of People that will say Apple. I can give you 10 reasons why Proliant is my choice. A Computer friend and I had this question this past summer of 2008. He went with a generic clone with one Quad Core AMD CPU and 8GB ram. Cost him more than $4,000. I found a used HP DL365 G1 for $600. I added 2x 300GB hard disks and made the ram total to be 16GB for an additional $400.
The quick and easy answer to which hardware, get the one that will allow the most RAM. 8GB is Better than 4 GB. 16GB is Better than 8GB. And 32GB is Better than 16GB. Some of the new HP proliants cab have 64Gb or 96GB and I have seen advertisements for 128GB. I say ram because the on line game you want to host is going to be memory intensive. The more physical ram you have is better. The the next big expense will be internet band width.
My own bias is for VMware ESX server. Then put as many Linux , Windows and UNIX machines as you want on the ne piece of hardware. THe other guys power supply is 600 watts and mine is 400 watts. This makes a big difference on the electric bill. I have 12 different virtual machines running on my one server. SME three times. Ubuntu 2 times, Win2k3 and three win2k8 64bit servers.
There are 1,00 different places to get a domain name.
To summerize, SME 7.3 server, HP Proliant, and VMware ESX server 3.x
Thanks