That server should be more than adequate for what you're talking about. So your eGroupware question has me stumped, unless it wants some obscure MySQL setting tweaked, or some other version than what's provided. Got your MySQL upgraded to 4.x? PHP to 4.3.x?
Have you checked that your disks are running with DMA enabled?
As to your SME6.5 questions, no, I would NEVER use a "release candidate" on a production server, no matter the feature set.