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Hi everyone...
I'm working with a firm that is into payroll
processing... we're thinking of procuring a
file server for the centralized storage of
data.... its a small organization... can
anyone suggest me a decent configuration...
for it....

You can use any computer as a file server.
Security is more important. Physical security is locking the server in a closet or somewhere where no one else can get to it.
Then of course network security.
A good software firewall like Comodo Pro is essential. Along with passwords and all of that, train your employees to be safe especially if this segment of the network will have Internet access.
The file server does not have to be a 'Hot" machine because it really doesn't do a whole lot itself.
Memory should be around 2 gigs and remember Quickbooks and Peachtree both have performance issues (they are slow in the multiuser mode.) These are known issues which you can research if you don't already have accounting software.
A diplomat is a man who always remembers a woman's birthday but never remembers her age.
Robert Lee Frost

It's a bit more complicated than that. Since the data on the file server is extremely important, you should use a "real" server, not a PC. A server may include RAID, dual power supplies, dual NIC's, a backup solution, etc., etc.
The hardware is important.
ASUS A8N32-SLI Deluxe
AMD Athlon X2 4800+
2GB RAM, X1900GT
2x37GB WD Raptors, RAID 1
1x250GB WD Storage

Steigrafix is also correct. But until we find out what level the OP is willing to go to I thought the basics would start the conversation off.
But I do agree with Steigrafix on all points.
Larry
A diplomat is a man who always remembers a woman's birthday but never remembers her age.
Robert Lee Frost

well i did some research ... n came across few terms... can u suggest which is the best one....(that'll meet my requirement)...
NAS, SAN, DAS, n there are several softwares for network file server... so shall i use those specialized ones or the normal windows will do.... ? well thanx a lot to everyone... :)

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