What most of the people answered to you its what they think , now , here its the true :) ...tested
With a core2duo ~2Ghz , 2 Gb ddr2 , hdd 7200rpm , and 3mb upload , using win2003 server you can handle 100-120 players without lag. If OS is setted to give all ressources to java process..do some reading about this.
With the same machine using ubuntu i was able to handle 160 without lag spikes. I added second hdd and used RAID 0, upgraded upload to 9mbps and i got to 250 players without lag...and i think it can handle more...
In present i have a 2 x core2duo @ 1,83 , 8 gb ddr3 , 2 raptors 15k/rpm using raid0 , 50 mb upload (in upload test i get clean 30mbps)ubuntu linux OS, and in test mode server with 500 connections runs at about 30% off capacity.... CpU`s varry from 10-40% ,RAM load its ~3gb for gameserver process , no read/write errors , eth0 is 6-7 Mbps in normal gameplay to 10-12 in sieges .
Have fun and remember , LEARN BEFORE OPENING A SERVER!
If anyone disagrees it can contact me and i can give proofs!