Me and my friend dabble in designing hardware, and recently designed a machine to be a server, and I dont mean with off-the-shelf parts, I mean designed the circuitry. We have built these small machines that have networking as a higher priority in the system. Does anyone think customers would be interested in hosting run on servers that are custom built or prefer brand names in them such as Intel etc?
Thanks!

Prefer brand names def.
UNLESS you can proof they are fast, give us some examples. If it has system level higher priority on Disk I/O and Network I/O than regular, what are the tangible benefits?
What are the benefits in general? How will software work on these custom machines?
That being said, if you use a good FPGA platform, custom tailored to specific jobs, they are hella lot faster on those specific jobs than regular servers, but they won't be able to do general purpose stuff then.
So, make an mini server designed to serve dynamic webpages from the hardware level (so PHP has to work) and make it easy for clients to use, if it's feasible, i'd guess there's market for that.
Infact, if it's feasible, and cost-effective, i'd bet my money in that it would become huge thing :)
and bottomline almost always is cost effectiveness.

Well, our current design uses an IBM PowerPC Processor which is a brand name (so could help).
Performance is astonishing, still havent been able to crash it in a high traffic simulation.
They are quite pricy at the moment, but there are some things we can cut out. In the prototype we used a single chip for each task (easier to troubleshoot) but now we could size down e.g. 10 chips into 1 chip.