yes, I had a very unfortunate crash on the first reboot of an UPGRADE install from osx server 10.4 to 10.5. Luckily, I had cloned the orginal boot drive (which also has about 300 gig of files) and I just popped that back in ,and restored the missing week's files from the unbootable but readable 10.5 boot drive attached externally. Apple support confirmed that reinstallation was my only choice.
Since it's only a fileserver, I love the idea of setting up all of the system files and user/password/permissions on an external and booting from that. (We don't use Open directory or any directory service) I would clone the boot drive it to use in the event of a crash (maybe 2 or even 3 clones!). Again, with 300+ gig of files, it it tedious to clone my entire current boot drive (I DO use all 3 drives in the Xserver)
Also, You mention that it woul dbe very slow booting form a USB drive. Please, tell me how to boot from a USB drive! Everything I have read only permits BOOTING externally from a Firewire, but I am always open to info from those more informed than me!