PFSense works with almost any kind of ISP connection, myself, I have two DSL modems in bridge mode. Both use PPPoE and have never had a problem.
As for the server, some use laptops, but you will need two interfaces, one for the modem and another for your network. You could leave you modem (no-bridge) and put everything into a switch, but that really defeats the purpose of using PFSense.
If you have not read the documentation on PFSense, of which I presume you have not, when you install PFSense, it will wipe out your drive and load onto it FREEBSD a Linux flavor operating system. So if you have anything you want to keep on either machine, back it up.