For the cost of hardware these days, I usually recommend running a dedicated server.
One complaint I often here from users (usually new to Linux/Unix or Open Source), is that Nagios is difficult to configure. The Nagios Book aims to dispel this myth, showing you how to build a Nagios server from scratch monitoring several hosts and sending alerts in a matter of hours. Note that it's not a competition when it comes to setting up any server, however I've heard reports of people complaining of taking days and even weeks to set up a Nagios server. This is simply not true, as you will find out!
Please note that this document does not explain the how's and why's of how to build a server, that is beyond the scope of this material. My goal is to try and get users up and running quickly so they can experience the power of Nagios. Having said that, I have created some basic steps to build a FreeBSD server from scratch.
These instructions were written and tested using FreeBSD 6.0, however they should also work just as well on earlier versions. If you're using Linux, some steps may be slightly different. I hope to add steps for each popular distro very soon.
I plan to add some other distro specific information here eventually. If you have installation notes for another platform, I'll gladly add it.