Well, The way I'm currently setup is this.
My VPS provider dose Daily backup's, So i also use my VPS as the offsite backup for my Website, Game Server Configuration files, Maps, Mods, ETC. The follow specs is what i have and i only pay $25 a month for my VPS. But the only thing i have installed on my VPS are
Webmin
MySQL
TCAdmin
And my VPS Specs are this.
50GB Disk
512MB Ram with 1024GB Burst
1000GB BW
Centos 6.2 x64
Now, You may decided to do it that way, In the long it's worth it imo. I would re-image your Linux machine (make back ups of your site obviously) and go fresh and use your Linux machine as your web. But that's all up to you of what sounds better