Need a server solution

Server Foundation is a severely limited edition of Windows. Has the number of computers connecting to the server grown? If I recall correctly, 2008 Foundation only supports 15 concurrent user connections.

Are you running an Active Directory domain, or are you simply using the computers in a workgroup setup? Are you comfortable in a Windows environment?
Do you know your way around other operating systems?

If you're willing to spend the time to learn the system, setting up Samba on a FreeBSD or Linux server would probably be the absolutely most cost-effective way to solve your problem, both in terms of being able to use relatively cheap hardware in your server due to the smaller footprint, and because in these systems you tend to spend some time setting everything up, but then you can forget all about the systems until the hardware dies.
Otherwise, I think a Windows server is the way to go, since you have Windows clients. Note that you need to check the hardware requirements for recent Windows versions to see whether you can upgrade your existing machine or you need to install the new system from scratch.
Perhaps the best way to go is to let the old system live and set up a new one in parallel with the old one, migrating clients in a controlled way and only shutting down the old system once you're positive you've migrated everything.