I think that Server controls are best used when they might appear many
times within one application. In your case, I wouldn't go through
the trouble of constructing a server control, when a user control could
do just fine. You can encapsulate most of the functionality and
rendering using a user control.
You will most likely only have the control in 1 section of each
application, and this suits a user control just fine. You can
also easily customize the UI through css so that the control will
integrate nicely with different designs.
As an example, a couple good uses of a server control could be a nice
ComboBox control, or an AJAX-capable textbox, or something else that
might appear many times on 1 page, or occur on many separate pages.
Hope this helps :)
Ben Scheirman
http://www.flux88.com