Din, first of all I must say that I felt very happy reading ur post about ur school and the desire to give something to it. Seldom, we find people like you

Whats also commendable is that you wanna break free from the conventional computing components to make them aware of alternatives
Oh, mine's gonna be a looooooong post too! So plz keep coffee, tea, cigarettes, drugs (or whatever you use!

)
1) I'd suggest you get an Athlon X2 with Virtualisation support (Plz goto the market for the prices).
2) A normal AMD/VIA chipset based mobo.
3) Minimum of 1GB DDR2 RAM
4) 160 or 200GB hard disk. I'd recommend an IDE hard disk, yes not SATA or SATA2. But if the teachers are competent enuff to install OS on SATA disks (which can be problematic sometimes) then you can go in for sata/2.
5) Standard KB, Mouse.
6) A 17 inch CRT monitor (yes, put these bucks you save instead of buying a TFT on RAM if you can; get 2GB)
7) A Standard UPS
8 ) A Geforce 6200 128MB (min.) GFX Card (Let them see Beryl/Compiz!)
9) DVD-RW drive
10) Good quality and affordable PSU + cabinet (look in the Hardware section)
11) Standard Speaker Set
This config shouldn't cost a bomb for you and yet perform well!
Now for the OS thingy. Dual Boot Between Debian and Sabayon.
1) Use Sabayon to show them about the eye candy in Linux (for all those Beryl/Compiz effects and other eye pleasing things)
2) Use Debian as the base OS. Install VirtualBox/VMware server/QEMU (or whatever you wish).
Let Debian be the boss here! Install Ubuntu 7.10 (when released) and OpenSUSE in the virtual machine. That way they'll learn to work on a Debian based distro (Ubuntu) and also an RPM based distro (OpenSUSE).
After you install, update and ready the OSs (make sure all the OSs are updated and haf all the necessary software installed including codecs etc.) then just burn the Virtual Machine Images on DVDs and give it to them. In case they fiddle around wid something in Ubuntu or SUSE, the teachers can jus delete the VM image and copy it from the DVD to restore it to Din-default settings!
That way, the students can experience the eyecandy (Sabayon), get a taste of Debian (Ubuntu) and also an RPM based distro (SUSE). So they haf everything and also not worry about screwing things up! That should wrap it up