I've just got a new server running Debian Etch (it's got to go stable _sometime_) with PHP5, and any new sites I set up or old sites I substantially modify end up there.

I don't think you can afford to get out of sync with Debian stable (which means supporting PHP4 for at least Drupal 6). It's probably the most conservative of the major distros used by hosting services, so it's a reasonable yardstick for how fast you can move without alienating a large chunk of your user base.

I think dropping support for PHP4 any time soon would oblige Drupal (and module maintainers) to keep supporting older, PHP4-compatible, versions of Drupal for longer - which may not be a bad thing anyway. Drupal 4.6, while unsupported, is not even two years old, and while web developers might see the value in upgrading, our clients may see the loss of security support after less than two years as a protection racket beyond even Microsoft's wildest dreams.