I want to set up a home sever for all the comupter to run off of. Which would be a good server to use?
Dell makes an excellent server. You should provide more information about what kind of server you are looking for.
For reference: I'm using a custom-built P4 running windows server 2008: though for cost reasons I'd recommend Windows 7.
I would like to be able to watch movies off the internet in my theater. How do i go about that?
Attach a device that can get streaming movies to both the internet and your home theater.
PS3, XBOX-360, an HTPC, one of the many blu-ray players that do this, certain DVRs, or a dedicated streaming box.
For reference: I'm using a PS3
I also would like to be able to watch movies off the sever in all the rooms in the house, How?
That depends on what server you use. If it's a Windows media server, you'll need windows media clients (the same group as streaming mostly). If you've got a custom stream-server, then it should have matching clients available.
Again for me: a PS3.