Keep it Simple
Doesn't matter how big the network is, just keep it all simple.
I see people saying Hyper V solutions, 3 Servers, 4 and now 5?!
All you need for a primary is 2 servers. No More. One for redundancy. You could even go for just 1, though not recommended of course. You need to have a safety net.
The Company I work for maintains over 130 Primary/Firsts/Middle Schools on a face to face basis, so we know that when there is a budget set, there is little/no room for negotiation.
Generally I do think sticking in a 2003R2 Server is a little mad, you need to think long term, with money getting tighter, the likelihood will be that you won't be doing a big rebuild like this for many years and when you are troubleshooting problems you will find many solutions that only apply to features for 2008R2 networks and "Server 8".
There is no harm in going down the Server 2008R2 route and sticking with XP clients. Especially since your client machines are old anyway. Though you will need new Client Access Licenses for the new 2008R2 Operating system. About £5 a machine with education prices.
Stick to the basics.
A Microsoft Server Operating System with the following roles
• Dynamic Host Configuration Protocol (DHCP) - Unless your router/firewall deals with this of course
• Domain Naming Service (DNS)
• Windows Deployment Services (WDS)
• Windows Server Update Service (WSUS)
• Active Directory Domain Services (AD)
• Group Policy Management (GPO)
Now you need to consider your active directory structure.
You will need a naming convention for your computers as well.
Knowing Primary Schools they do tend to have their computers moved about a lot, moving from one room to another, so I try to avoid putting room names, stick to generic names like School Initials - Make - Number. e.g. ASN-DELL-01 , ASN-HP-01 or just generic Class ASN-CLASS-01, 02. So if you move computer Class-04 to from room 10 to 11, you don't need to change its location in your directory.
Once you have AD sorted out. Group Policies. Apply your computer policies, such as Basic Utilities (Flash, Shockwave, Silverlight, Media Player 11, codex etc..) and a policy for your curriculum software.
Then User Restrictions, User Redirections etc.
Put your Shared areas on your server. Set your permissions.
Use a Script or (if 2008R2, group policy preferences) to map your network drives and printers.
Technically from then on you have a network.
Your method of operating system deployment is up to you. If you are familiar with Linux then go down the FOG Route. Very quick. If you want to experiment with some advanced technologies (while not paying for anything) go down the Microsoft Deployment Tools (MDT) Route, bit of a learning curve but is very powerful.
If you want to go down the legacy route, you would need a Server 2003 box and you can use RIS. You could have it in Hyper V, but now we are over complicating things. It's so easy to go off on track. Lots to play with yet little time to learn it.
You need to then consider your backups. Stick to what you know, there is no harm.
Tape Drives, Hard Drives or NAS. All easily implemented. Tapes are expensive but are reliable, faster and cheaper over a loooong period of time. Hard drives are portable and easier to take off site, NAS is good for automated procedure, just ensure its in the furthest part of the school from the server. Generally the best backup is offsite, but that costs money, which you don't have.
You will need a reliable backup application to manage all this, backup exec will come for next to nothing when bought with a Dell Server, Macrium reflect is cheap for a server license and Acronis isn't too shabby. Just don't rely upon the inbuilt Windows Server Backup. It's just dangerous to rely on something that's free with a server and made by Microsoft. Limited in functionality as well and not compatible with Tapes, so forget about that right now.
Just keep it all simple. 2 Servers at most for a primary is all thats needed. People may call me mad, but unless you work in primarys' (notice the plural) its not as straight forward as people think to just go out there and implement 5 servers, there is a budget and you're lucky to have that in schools like this.
Hope this helps.