What router/switch do you have?
You'd need a good router if his rig is remote or a switch if his rig is local: I'm thinking he lives with you.
remote: use MAC address filtering to accept his pc to network. Unfortunately, consumer routers don't have much control. Either allow network & internet or none. But since he's connecting from remote, he won't be able to use your Internet. Cuz he'd need Internet as well.
local: plug all pcs in the switch, turn on MAC address filtering on your router, allow ONLY computers you want to access Internet. Basically, the switch is still available to anyone so it still shares data from server. Don't know what router you use. Take this for example:
http://support.dlink.com/emulators/dir625/109/Advanced_MAC_Address_Filter.html
[wall]-[modem]-[router]-[switch]-[computers]
Either way, you'd put the server in DMZ: demilitarized zone. No protection. Ubuntu is more robust than any consumer routers. It got firewall (iptables). Set up rules to ban incoming file sharing from WAN & allow only LAN.
For $400 US and shopping at newegg.com:
-- quantity of item 1
LG DVD Burner Black SATA Model GH22NS50
LG DVD Burner Black SATA Model GH22NS50 - OEM
Item #: N82E16827136167
Return Policy: Standard Return Policy
Protect Your Investment (expand for options27-136-167|hide options27-136-167)
Service Net Replacement Extended Warranty Plan
The product will be replaced and shipped directly to you at no charge(more info27-136-167.0.18)
* 1 year: $6.99
* 2 year: $11.99
$23.99
select item 2 quantity of item 2
APEX DM-387 Black Steel MicroATX Slim Case Computer Case 275W Power Supply
APEX DM-387 Black Steel MicroATX Slim Case Computer Case 275W Power Supply - Retail
Item #: N82E16811154087
Return Policy: Standard Return Policy
-$5.00 Instant
$49.99
$44.99
select item 3 quantity of item 3
Western Digital AV-GP WD2500AVVS 250GB SATA 3.0Gb/s 3.5
Western Digital AV-GP WD2500AVVS 250GB SATA 3.0Gb/s 3.5" Internal Hard Drive -Bare Drive
Item #: N82E16822136523
Return Policy: Standard Return Policy
$44.99
select item 4 quantity of item 4
SAMSUNG Spinpoint F3 HD103SJ 1TB 7200 RPM SATA 3.0Gb/s 3.5
SAMSUNG Spinpoint F3 HD103SJ 1TB 7200 RPM SATA 3.0Gb/s 3.5" Internal Hard Drive -Bare Drive
Item #: N82E16822152185
Return Policy: Standard Return Policy
$89.99
select item 5 quantity of item 5
MSI 785GM-E51 AM3 AMD 785G HDMI Micro ATX AMD Motherboard
MSI 785GM-E51 AM3 AMD 785G HDMI Micro ATX AMD Motherboard - Retail
Item #: N82E16813130247
Return Policy: Standard Return Policy
Protect Your Investment (expand for options13-130-247|hide options13-130-247)
Service Net Replacement Extended Warranty Plan
The product will be replaced and shipped directly to you at no charge(more info13-130-247.0.18)
* 1 year: $9.99
* 2 year: $16.99
$79.99
select item 6 quantity of item 6
OCZ Gold Edition 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1066 (PC3 8500) Dual Channel Kit Desktop Memory Model OCZ3G10664GK
OCZ Gold Edition 4GB (2 x 2GB) 240-Pin DDR3 SDRAM DDR3 1066 (PC3 8500) Dual Channel Kit Desktop Memory Model OCZ3G10664GK - Retail
Item #: N82E16820227346
Return Policy: Memory Standard Return Policy
-$10.00 Instant
$89.99
$79.99
select item 7 quantity of item 7
AMD Sempron 140 Sargas 2.7GHz Socket AM3 45W Single-Core Processor Model SDX140HBGQBOX
AMD Sempron 140 Sargas 2.7GHz Socket AM3 45W Single-Core Processor Model SDX140HBGQBOX - Retail
Item #: N82E16819103698
Return Policy: CPU Replacement Only Return Policy
$32.99
Subtotal: $396.93
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I've been using the exact same case + psu for over 6 months, but my cpu is a discontinued 45W OEM dualie. You can downgrade the ram to 2 gigs, HDD to 80 gigs minimum, ditch the DVD burner or downgrade it to DVD reader (you can install Ubuntu from USB stick if you have a 1GB one or bigger), upgrade the cpu to a dualie if you do video/audio transcoding (i.e. PS3 won't take MKV videos so it must be transcoded to AVI or something supported).
http://www.newegg.com/Product/Product.aspx?Item=N82E16820145246
http://www.newegg.com/Product/Product.aspx?Item=N82E16822148528
http://www.newegg.com/Product/Product.aspx?Item=N82E16819103688
And a cheap gigabit switch. I wouldn't pay more than $50 unless it's a used biz/enterprise-class managed switch:
http://www.newegg.com/Product/ProductList.aspx?Submit=ENE&N=2010400030+1733045517+1150210242&QksAutoSuggestion=&ShowDeactivatedMark=False&Configurator=&Subcategory=30&description=&Ntk=&CFG=&SpeTabStoreType=&srchInDesc=
Get Ubuntu on USB by getting the iso & write it to a USB stick with the windows program. The server edition won't install from USB due to missing dvd/cd drive. The desktop edition installs from usb perfectly. If you're doing a CD install, disregard the previos step, just get iso & burn it on a CD/dvd.
http://www.ubuntu.com/getubuntu/download
https://help.ubuntu.com/community/USB%20Installation%20Media
Install only the barebone without any GUI(KDE/GNOME,etc.). This will be a very lean fast machine. After install, then remove USB/CD.
Restart, log in as user, install LAMP for webserver, mediatomb for streaming audio/video & samba for file sharing (must have; works with any windows/mac os).
https://help.ubuntu.com/9.10/serverguide/C/index.html
https://help.ubuntu.com/9.10/serverguide/C/lamp-applications.html
https://help.ubuntu.com/9.10/serverguide/C/samba-fileserver.html
https://help.ubuntu.com/community/MediaTomb