Personally if you don't have a techincal knowledge, I wouldn't put Linux on the box if you are going to use it to backup important data! I'd put something on there you know, probably some form of windows... I'd then use another computer to play with Linux. The main reason being if you break linux, then to fix it is either going to take time or be near impossible depending on knowledge and googling skills!
Current network setup:
Yep sounds like a standard non domain based network, so will make things a little more difficult
Backups:
One question does each user have a different username to login to their computer, do they all have passwords?
If so I'd setup multiple shares on the server with each folder the same as their username, you'll then need to setup the users on the server as normal users but they would need to enter their passwords on the server (Due to lack of domain controller) This will mean that you can restrict access to each folder by the username.
Then I'd map a network drive to that folder on the server, so assuming the server is called "SERVER1" you could use the below code in a file called 'mapuserdrive.bat' and put this in the startup folder of each user..
net use u: \\server1\%username% /persistent:yes
If you then wanted to map the my documents folder to use the U drive then you could, and that would automatically backup all documents to the server, if you have laptops however you'll also have to setup cache, to allow offline files, which will sync when the share is available (connected to the network)
If you are using XAMPP currently, and happy with that, then there's no reason you couldn't run that on the server as well..
The other alternative is setup windows server as a domain controller, but that would be quite a pain if your users aren't part of a domain already and Windows 7 home I don't believe is compatible?
Maybe we have given you some ideas, maybe I've just confused matters