One of the services packaged with OS X Server Leopard (there are so many) is Time Machine Server. If you're running a network of Leopard notebooks and desktops, centralized Time Machine backups are easier to administer and secure than doling out a fleet of FireWire and USB drives. However, if you want to carry each client's protection beyond Time Machine's rolling 30 day window--Time Machine will retain weekly backups until it runs out of space--you might have to set aside twice the size of each busy client's internal hard drive to exceed 30 days' worth of coverage. The headroom varies widely by user, but do you want to try to tailor a backup strategy to each machine?
You have to weigh Time Machine Server's physical server (Xserve or Mac Pro) and storage costs--expenses that can't be avoided in any disk-based backup scenario--against savings in administrators' time ("please mount volume xxx") and user data lost to infrequent backups and cumbersome restore procedures.
For me, what sets aside all arguments about cost and flexibility of Time Machine Server is its catalog. Lots of backup utilities maintain catalogs, but Time Machine's catalog is chock full of metadata and is completely maintenance free. Users access Time Machine with a Finder-like interface that conceals the fact that they're even accessing a shared volume. When using Time Machine server, administrators maintain the ability to do point in time restores, or migrations, without the time or effort of taking full volume snapshots.
With regard to the incremental cost of storage as clients are added to the LAN, someone suggested attaching the USB or FireWire drives that would be on users' desks on the server instead. For five clients in a casual setting, sure. You could unmount any machine's backup drive, hand it to the user and tell them to do their own restore. Leopard presents "restore from Time Machine backup" as an option when you boot from the install DVD. For more than a few clients, or where the purpose of Time Machine is more critical than "undelete," I'd rather see a more robust enclosure, even a dumb backplane, than a daisy chain of FireWire drives.
Keep in mind that Time Machine doesn't absolutely require a server or an external physical volume. You can split local drives into multiple volumes, and use one for Time Machine. You end up with a backup volume that's bigger than the primary, but the average user is none the wiser. That takes care of undelete, and more old fashioned methods can be used at the server to cover worst case recovery.
What would I like to see in Time Machine? My one and only desire is to have Time Machine run only when the client is idle. This is really driven home when you try to use Wi-Fi, even 802.11n, to connect to a Time Machine Server. My strong recommendation is to use copper for Time Machine, at least for the volume copy that it makes as a first step. I realize that RJ-45 sockets, and users who sit still long enough to take advantage of them, are rare these days. If you must use Time Machine Server over wireless, or, heaven forbid, broadband, remember that I warned you against it.