I have a $160 mini ITX ION motherboard with a dual core Atom and 2GBytes of ram which I use as a NAS and XBMC. It is in the lounge in a home made MDF case with a perspex front panel. It has 2 2TB SATA drives in a single logical volume. I don't worry about raid for back up as I can always recover the media. I use samba to share the files with the rest of the house.The distribution is xbmcbuntu with a few tweaks for the hardware. Noise and cooling are not a problem and plays 1080 video fine.
I like having only one machine which sometimes is left on all the time but if I know no one is going to be home just power off with the front panel button like a VCR.
The board has 3 Sata ports so I still have room for some more expansion.
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