i am looking for a server i could play around with. my budget is 300.
also can i use a regular desktop as a server as well
Like Brett said, you can pick up a server to play around with for a few hundred bucks off eBay. New servers vary wildly in price depending on what you need them to do. If you want to serve up a personal webpage, a $60 Atom setup can be your "server." If you want an 8-CPU system for doing massive fluid dynamics calculations, those can cost six figures. If you already have some familiarity with the hardware, pick up used stuff on eBay and put it together yourself. You can find lots of CPU(s) + RAM + motherboard combos from about 2005-2007 or so going for very little money if you poke around a bit. My HTPC has server guts; it has a motherboard costing $30 and the CPUs (essentially a pair of Core Duos) cost $12 apiece. I got a box of assorted RAM for it, which cost $20, and most servers from that time period use the exact same PSUs a current desktop will. Ironically your heatsinks are usually what costs the most as eBay sellers tend to either not include them or include a passive rackmount heatsink you'll need to replace with a desktop-style active heatsink if you are going to be using it in a tower case.
You can use a desktop as a server as long as it has enough grunt to get your job done. Low-end servers often use hardware very similar to a desktop. The biggest difference would be the OS, you can't do much for serving files or webpages using a non-server version of Windows. If you want to use Linux, you can do whatever your hardware will let you do.
I've managed to get some workstation motherboards off EBay and some cheap processors. I use them as desktops and servers as they both have dual six core Opterons.
One is a XW9400, the other a Tyan S2927( which cost £40 ), the S2927 has dual Opteron 2419 which gives 12 cores at a tiny 1.8GHz but at £19 each, still a great start for a virtual machine host. The XW9400 has dual Opteron 8435's which cost me £100 - but again 12 cores at 2.6GHz isn't bad.
I run Ubuntu and use KVM/QEMU for virtual machines and to play with clustering etc.