At the CS Department of Montana Tech, we run Debian 3.0 on our two main department servers (one's the nfs server, the other's the main server people use for interactive off-campus logins), and on 11 other hosts set up as a general-purpose lab used by roughly 60 students of three of our courses.
We have no assigned systems administrator, so it was very important that our systems run with a minimum of fuss, day in and day out. Debian 3.0 has lived up to this challenge: the students use our servers for networking assignments, C and C++ programming, and the systems have been trouble-free.
Debian's package system (we usually just access it via dselect) is a big win. Security updates are hassle-free, and our systems meet our current needs quite comfortably. I've used a variety of commercial Unixes, and Debian's packaging system and reliability beats them all, hands-down. (For what it's worth, I've been a full-time systems administrator in both academic and industry settings, so my experience with commercial systems has been both prolonged and painful...)