Windows Server 2008 Web vs Standard
Solution 1:
Web edition does not require client CALs and would be the preferred OS on the Microsoft side for web hosting. It has many limitations compared to Standard edition but if the purpose is to run a public facing web farm, then it is the right choice.
http://www.microsoft.com/windowsserver2008/en/us/r2-compare-specs.aspx
http://www.microsoft.com/windowsserver2008/en/us/r2-differentiated-features.aspx
For virtual environments you'd normally license the servers with Datacenter editon per processor but I haven't looked into running a bunch of web editions on that platform from a licensing perspective.
Solution 2:
The Web edition is a cut price version of Windows Server for Web hosting companies to make Windows Server less uncompetitive compared to Linux web hosting. It has a reduced feature set. I have tried to find a feature comparison on the microsoft website, but they are too busy trying to flog you Windows Server 2008 to tell you about the 2003 versions.
You may be able to use the Web Edition, but expect to run into unsupported feature issues, and be pleasantly surprised if it works