The problem is solved. This is what happened:
After figuring out how much space a lamp server + vsftpd server + (what else?) would take, I copied some very bulky files (/var/cache/apt and /var/lib/apt/lists) to an ext3 partition of a usb hard drive (FreeAgent Drive, 500 GB), renamed the original files as .bak and symlinked to the hard drive.
Installation of vsftpd, apache2 and mysql (apt-get install) went fine, and the new packages made their way into the cache on the hard drive, so I thought it was safe to remove the .bak files and make space for the rest of the installation. My mistake!!!
Copying had changed the modification date of every file in /var/lib/apt/lists to current date. As a result /var/lib/apt/lists/Release appeared more recent than the Release file of the repository, and apt-get update didn't work!
To restore the modification date to an earlier date (based on other files in /var/lib) , I did:
root@ubuntu:/var/lib/apt/lists# touch -m -t 0905270000 ports.ubuntu.com_dists_jaunty-updates_Release
root@ubuntu:/var/lib/apt/lists# touch -m -t 0905270000 ports.ubuntu.com_dists_jaunty-updates_Release.gpg
Then the Release file was updated correctly

After installing the 2 servers, the root file system still has plenty of space left:
root@ubuntu:/# df -h /
Filesystem Size Used Avail Use% Mounted on
rootfs 462M 218M 240M 48% /
[Edit] Forgot to mention: before changing the modification date on the Release and Release.gpg files, I had moved /var/lib/apt/lists back to its original place. I could have gained some more space by leaving that folder on the external drive.