Are you sure exec() is enabled? In php.ini file you can set a list of functions to disable.
Besides: +1 for linux ;p
cereal
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Then try to run system() instead of exec() you will get ffmpeg output, so you can see what is going wrong, maybe is just the path or the permission with directories.
You can use Debian, Ubuntu or CentOS (or whatever you like), here there is the Ubuntu server guide for 11.10: https://help.ubuntu.com/11.10/serverguide/C/index.html
Bye.
cereal
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