How do I set up a web-service on VPS?


I want to set up a subdomain as a web service that accepts requests in XML format and sends a response back, and then does some server-side processing and log-file-writing.

What steps are required to set up a web service? Does the httpd.conf need to be changed? Where can I find documentation about this?

What I’ve done so far:
[] I have upgraded from shared hosting to VPS because running a web service listener is not allowed on a shared plan.
] I have created a new subdomain via the DH panel that is running on the VPS machine.
[*] I have created an admin user on the VPS machine so that the developer can access it with SSH (and SFTP?).