Lol, sure you can use an old compaq to route. Throw two NICs in it, load Windows 98/98SE/ME/2000/XP on it and use the Internet Connection Sharing feature and put a good firewall on the machine. It doesn’t need alot of computing power or RAM unless you’re talking about routing alot of people and/or traffic, so you’re not going to experience too much of a slow down if any at all. I have a server at home running Windows Server 2003 with two NICs (well three, but two point to the same network) and it’s not a problem at all.
If you’d perfer a hardware appliance router, the Netgear routers are rated very highly and work very well from what I understand. There are a few advantages to using that old Compaq as a server though, such as the ability to plug a printer into it and use it as a printer server (where everyone on your network can print to it no problem).
Feel free to ask any more questions you like. I, and many others, will have no problems answering them at all.
It’s a little late and the person who posed the question hasn’t come back, but you happen to be right. You’d likely need the switch hooking all of the switches and the servers together to be 1000 base T (Gigabit Ethernet) nad each switch have a gigabit uplink port, but the logic is sound.
Oh, the storage would either be directly hooked into the backbone switch (quite possible) or would be in the servers themselves. However, storage is not the only usage for servers, as you would usually have consolidated security across the network, password authentication, print services and several others.
PS: I used to be a sysadmin on a StarFire (see link below).