I updated this Xserve to 10.12.2 using the patcher tool, It worked successfully however the integrated graphics no longer work due to driver issues. I installed a low-profile Nvidia GT 210 and installed drivers for it and it works perfectly. The problem is the ATI x1300 which is integrated in the machine is acting as if the monitor is plugged into it so when I VNC or Screen share from my Macbook into it, it shows 2 screens and has major lag issues due to that. Is there anyway I can disable the ATI??
EDIT: I've found a solution for anyone looking. Either using SwitchRezX for a less permanent solution or removing the X1300 from just under the PCI-E slot where the mini DVI is found. Did the latter and it's working fine now, However if you plan on doing OS upgrades that require you to get into the boot menu you're going to have to put the old card back in and use Mini DVI.