Linux for a diskless workstation provides:

Good support for a wide variety of hardware

Low cost
      =>  No per-unit licence fees

Readily available support for remote display of programs
      =>  The X Window System was designed for remote display
      =>  XFree86 supports most video hardware

Linux 2.2 provides useful additional support:
      =>  Kernel automatic DHCP
      =>  Kernel support for root file system over NFS