We were using Lenny. ( Well Sid, really ). Had to do that for development. I upgraded my server with ubuntu 10.04, for a different project. Noticed the packages. Wearing my developer hat, it's a no brainer. Everything we need is there.
I'm the admin as well. We might need more than one "box" (running on VPS for now). I do not want to build things that apt would put on for me. It's not hard, but I'm going to need that time.
The debian "box" has a bunch of stuff on it, that'll have to be integrated properly, but I think we are going live in a distressingly short time. (Just found out.)
I am aware of the reflexive answers to this question. What I would like to ask is are there critical bugs or critical instabilities that would make one shy away from the ubuntu/server path? I could not find any bugs that would stop me, but perhaps there is something?
For stability, you will probably want to consider using an LTS (long term support) edition, of which 10.04 is one (as is 6.06 and 8.04). While Ubuntu is on a six month release cycle and is supported for eighteen months, the LTS editions are supported for three years for desktop and five years for server. This means that Ubuntu 6.06 LTS Server will be supported for another year. It was released in 2006.
None I'm aware of for typical roles. I use it. For what I want - NFS, Web, FTP, LDAP, I've not met a problem yet.
In our shop we use Ubuntu all over the place, on both physical and virtual machines.
The only boxes we don't use it on are mission-critical servers (databases mostly), where we use SLES, because the hardware vendor doesn't support Ubuntu. Having the hardware vendor support your chosen platform is important in some shops, it gives execs warm and fuzzy feelings. :-)
there's a reason the packages in the debian stable branch are so 'outdated', they're stable. any time you use 'bleeding edge' versions for production servers, you're taking the risk of encountering a disproportionately larger number of bugs.
however, there's no reason Ubuntu could not be used as a server. I certainly wouldn't recommend sid or lenny on a production server, either. but maybe you have needs for newer, bloodier, libraries and the like.
rather than do the whole system to a testing/unstable branch, however, i would look at building your own packages, as needed, to keep up, or investigating
apt-pinning