Use AD if all the computers are running XP Pro which will enable users to log onto any computer and access only their files.
Say you have a single server with 3*75gb Drives which would give you 225gb, give each student 1gb of storage and have another 75gb drive running the OS and programs...
Well you could always disable Aero if the Video card isn't up to the job, also I think Vista should be more reliable than XP once Service Pack 1 has been released.
It isn't unknown for a school of 400 to saturate a T3 (45mb) however so long as you run some form of access control you could get away with 10mb Symetrical.