My setup:

Windows 2003 server with 1Tb storage (I use it for all sorts of stuff as well as storing music).
Exact Audio Copy for rips, direct to FLAC, and also the Accuraterip plugin.
Squeezeboxes for serving around the house over wireless network. One 802.11g wireless access point.

I use J.River Media Center on the PC for all my PC playback. Great piece of software.

Setting up a PC to do the work is pretty trivial. The most effort comes in ripping all the discs.

If you're serious about moving over to a music server then you absolutely must use software such as EAC for perfect rips otherwise you chucking away quality for convenience.

Mark

My Music : My Cinema