Well, I dont know much about unlink() but if it's trying to delete a file it might be because the PHP interpreter cannot delete files that belong to users, that way you cant write PHP to delete other users files. You might want to contact your host about that one, but you might try using some sort of system command to tell it to delete the file instead.
About setting up your server, as far as I know all you'd have to do is get your domain name and make sure you have a static IP address, you then set up that domain name to go to your IP address (this is normally done when purchasing your domain name). You wont really need DNS unless you want to have sub domains say inside your network, but most Linux distributions come with this as a package to install (although I havent look at linux much in the last few months. Then install apache as your web server (or IIS if your using windows), and set up an FTP server (you'll find most of all this stuff on your Linux CD's, and I daresay Windows 2000 comes with it all too.
Get a good network administrators book too, thats how I learnt about it all, especially one that covers Linux.
~ Paul
