I'm currently running Ubuntu 11.10 on a PC which can no longer handle the graphics (it's a dinosaur of sorts), and I now want to turn it into a home file server. To do so, I wanted to replace Ubuntu with Ubuntu Server, the command line-only one. How do I do this?
You can use Ubuntu as a server, and you can install Gnome, KDE, etc onto Ubuntu server. The difference is in the mix of applications installed. So, you could use your existing system as a server without running the GUI shell, or you can install a different shell if you want a lightweight GUI, such as xfce or lxde. I have an old Ubuntu 10.x system that I use as a server, and I rarely even log in directly, so it sits at the login prompt. I mainly use ssh to log in, and if I need to log in directly, I have a choice between a virtual terminal or a gui shell.
If you really want the "official" Ubuntu Server, you will need to install it. If you go that route, you might as well install a LTS release. 12.04 is the best choice, and Ubuntu has a good guide for setting up the server with LAMP apps, wikimedia if desired, etc.
Edit: Default Kernel Difference As stated in the comment below, there are some differences in the default kernel for server and desktop editions. There are certain optimizations that are turned on or off for Kernel vs desktop, although that information doesn't seem to be very prominent in the main documentation that I could find. There are differences in IRQ timing and scheduling, where the desktop kernel is optimized more for smoothness in the GUI, but is not good for higher-volume server systems. But, it seems that 12.04 has stopped using different kernels for the two.
As stated below, the 12.04 32-bit version evidently comes with only the pae version of the kernel (pae is what allows 32-bit computers to access more than 3.2GB of RAM). If your computer is very, very ancient, or a Pentium M machinge, it may not support pae. On my system, they can be interchanged, but if your computer doesn't support pae, then there may be some issue with this. I haven't see that mentioned in the documentation so far.
If you do want to install a server, the installation is different. It uses a non-GUI install instead of the Live CD.