Microsoft Windows Small Business Server is a line of server operating systems targeted at small businesses by bundling the operating system with a number of other Microsoft products that would normally need to be purchased or licensed separately. Probably the most notable inclusions are Exchange, SQL Server SharePoint and ISA/TMG (Microsoft's firewall and proxy server).
To ensure that larger businesses don't use the Small Business Server line, the upside of bundled products comes with limits on number of users and functionality needed by larger businesses, such as an inability to use clustering or child domains, for example. Additionally, there is no upgrade path from the SBS versions to the "standard" line of server operating systems.
The line started with
BackOffice Small Business Server 4.0, in October of 1997, and was based on NT 4.0. The most current version is
Windows Small Business Server 2011, which was released in December 2010 and is based on Windows Server 2008 R2. Microsoft has announced that it will be the last in the line, and will be replaced by the "Essentials" version of Server 2012. A comprehensive list of the SBS editions, and the products bundled with them can be found at Wikipedia.