Right, not sure what the default setup is for your Linux distro but usually it comes with a fully working Apache webserver.
If it does you can use this for server Palace media, all pretty basic: In the public webfolder you create a media folder, put all your Palace media in there. Check the web address for this folder. If it is something like
http://mywebaddress.com/media/ you can use the 'fileserver command in Palace to set this as the your media folder.
Not 100% sure if its
'fileserver
http://mywebaddress.com/media/
or
'fileserver
http://mywebaddress.com/media
I think you should have the trailing slash.
For media it makes no difference where it is as long as you point to the correct, publicly served, folder on any website. So it is easy to use another webservice as well as your own.
Instant Palace is just a web based client that gives your visitors the option to visit your Palace through your website. The only requirement for this is that this has to be served from the same server as your Palace Server. And getting instant Palace working takes a bit of tweaking. Something to look at much later perhaps when you got the basics sorted.
Anyway, personally I think getting the "real" apache server working on your Linux install will have more benefits for the future, giving you the option for a real website AND serving Palace media in the fastest way.
Ok, I hope this all makes sense, you can do a search for "serving Palace media" in the forum for more info on this topic.
Here is the original topic I posted on the subject in 2002:
Home hosters: Serve your media from a website
good luck and let us know how things went :)