latest version of Linux

My Linux box is suffering from dis-use. I had version 5.1 and had all sorts of problems.
What is the latest version? Does it have a better GUI?

Hmm. I have to assume that by "5.1" you mean Red Hat Linux 5.1.
There are a lot of newer distributions. Red Hat (http://www.redhat.com) is up to 6.0, SuSE (http://www.suse.com, my personal favourite) is up to 6.2, Debian (http://www.debian.org) is at 2.1. Not to mention Slackware, Caldera, Mandrake, Stampede and the host of others.
If you are a primarily GUI user, all the GUIs on the latest versions are much better. Red Hat installs GNOME (http://www.gnome.org) by default, which is OK, but it only seems to be general bull-headedness on their part which prevents them installing directly to the generally better regarded KDE 1.1 (http://www.kde.org). SuSE defaults to KDE, with a very wide set of tools configured and available immediately.
All recent distributions have good hardware support (especially graphics cards), and use the new 2.2 kernels with much improved networking and the modern glibc libraries.
If installation worries you, Caldera OpenLinux is considered to have the easiest installer ("Lizard"), but if you know what hardware you have, any of them shouldn't be a problem.
I reckon it's worth an upgrade.

Sounds like Caldera is the one for me.
I want to get in more GUI time under Linux, but I also want to do a few server things (mostly servlet stuff) - is Caldera still the choice for me?

I don't see why not. It comes with a fairly recent version of Apache (1.3.4, which I use here), but you will need to install a more recent JDK and Jserv yourself (it's not hard, they come as RPMs which should just install. If not, then rebuilding Apache and/or Jserv is just follow-the-steps)
Report back how you get on. I'm sure all of us porkchop users will do our best to help if you get in trouble.