I ran one for a while, FreeBSD box for friends who needed a compiler, perl parser, and generally wanted to learn *nix.
Anyhow, the first thing I did was not expose this machine directly to the net. I put it behind a firewall which I was comfortable with the security of...it was rootable I'm sure, but I couldn't easily find a hole, and I monitored it carefully with network and host based intrusion detection, anomally AND signature based, as well as tripwire on important files with the hashes on a cdr. Now I just setup a non-standard SSH port to forward from the firewall back to the box that was to become my community machine.
Part of the advantage to this approach is not having to turn off every single service people might want to know about. Chargen is a great troubleshooting tool, but it's a security and DOS nightmare, shielding the box from the net to an extent allowed me to leave this service available, and demonstrate both the use of it and packet sniffers to my friends who were interested.
Next, I created two classes of user who was needing access, the ones who wanted to compile and that's it, and the ones who wanted to learn more. The first group got custom designed home directories that were chrooted, into which I dropped the binaries they needed and nothing more. I removed their access to EVERYTHING else. The second class got real accounts, with real home directories. Fortunately this group was a lot smaller, and thus easier to grant privileges to. I was also an inquisitive bastard and ran ttysnoop so I could keep a general idea on what these folks did with their accounts.
I did continually keep up on local root exploits on bugtraq, made sure I patched binaries and libraries as they became fixed, etc.
The best part was of course carrying on ICQ or IRC conversations with these people as I walked them through various admin tasks, slowly granting them more privilege through sudo until they gained familiarity with tasks they were likely to face in the workplace if they went that route.
One of the big benefits I got was that I had to know what I was doing, I learned an awful lot about my system that I never would've noticed otherwise because of their questions. Teaching people about something is the best way to learn it yourself.
Have fun setting yer box, and don't let the doom sayers say it can't be done. It'll be a trial and error process, and you'll have some frustration, but keep pluggin' away at it, and sooner rather than later you'll have a heck of a fun community machine for everyone to enjoy. I'd also advise having people come over and HELP you set it up, some of those folks who wanna learn maybe?
"Its like someone opened my mouth and stuck a fistful of herbs in it." - Tamio Kageyama, Iron Chef 'Battle Eggplant'