I think Apple's "digital hub" concept encompasses the general desires you're talking about here. I'm not saying that's the best solution, but I think they're heading in the right direction. I currently use iTunes and an iPod to organize my music and play it through my home stereo. I used to just pipe it in directly from my home computer over a very long analog audio cable, but I rearranged the living room and now the cable doesn't reach.
My ideal solution would be a stand-alone music server device. It would have room for 4 internal (hot-swappable!)hard drives. It would come either pre-configured/pre-loaded with a RAID 5 (3 + hotspare) array or empty so that geeks can do their own RAID arrays. (RAID 5 is a great compromise between redundancy and least waste, with a hotspare, up to two drives can fail before you start losing data.) It costs about $500 to buy a half-terabyte array. That's enough to store over 700 CD's worth of uncompressed music.
The back of the device would include a removable power cable, ethernet jack, firewire port, and both optical and coax digital audio outs. The unit would be fanless as well, relying on ample heat-sinks to dispense heat from the drives and power supply.
To get music onto the server from your computer, you'd either connect with a firewire cable (like a giant iPod), or over the network with ethernet. Any management of the device would be done via a web interface over the network. (This avoids the headache of having to support software on multiple operating systems.)
The device would naturally also be able to stream music over the internet.
I think that covers my ideas.
