Will I be downvoted for suggesting WHS as an option on a HP MicroServer? ...mitigating factor = I don't have that setup, but if you only like M$oft, then it's an option.

Gloat - I've got Vmware ESXI 5 running on mine.

Justification- I prefer my backups on VHD's as they are easier to move/ manage than their physical counterparts.