Alright, if you want one I have one for sale in the FS thread!
You cannot adjust fan settings without hacking the EFI layer, which, to my knowledge, no one has done yet, since 99% of the people who own xserves never hear them.
Okay, sorry, but in all seriousness it's loud. It's quite loud. I have one in my dorm room and I am trying to sell it specifically becuase of that. It was easier because I can rackmount it, but a Mac Pro is really better suited if you plan to use it with you next to it.
It works just like a normal computer, there is NO audio out however, remember that. Honestly, it's the most stable hardware i've ever used, the hardware monitoring is fantastic, temp sensors everywhere, I really love it... it's just, it's designed to keept he machine as cool as possible, not as quiet as a Mac Pro, so it's too much to sleep with. That was my problem.
In terms of expandability it's really fantastic. I have a 16TB rackmounted array, a rackmounted FW audio recording interface, and having the computer rackmounted too is fantastic. I can just close up the doors and take it with me as opposed to moving two separate items. If it was quieter I'd use it for sure.
you CAN upgrade the video card, you just need to make sure it fits, I have a x1600 in mine and it works just fine, in addition to the onboard video. I have a highpoint 4322 in it and ir works very well