With a Duron 1200 (512MB RAM) I am running 30 simultaneous users doing a quiz using lighttpd, PHP as fastCGI with individual user permissions, MySQL5. I am really satisfied.
I am also considering to virtualize webserver, mailserver and mysql-server at the moment. lighty is great for that due to its integrated load-balancing mechanisms - PHP-threads may also run on another physical (or virtual) machine. If I run into trouble with one VM, I'll be able to migrate it to another machine quity easily - backups are much easier, too.