what makes Xserve different from a standard Mac though is the fact that there is no video card. it is made to sit in a "rack" along with other servers and rack mountable devices like routers, switches, etc. to access Xserve you must use a "client" to remotely access Xserve.
You could also, install OS X server on a PM and it would accomplish the same thing, but the Xserve is designed specifically for operation where they need more than one server in a small space.