Curbfeeler -
I'm not familiar enough with the Squeezebox to compare/contrast, but back in March, I started putting together my server system. The advantage, to me, is that the biggest chunk of hardware, the computer, was already bought. I had an Apple iBook G4, which is a very quiet computer, inside and out. That allowed me to start very simply, by picking up a 500 mb hard drive, plugging it in and ripping music. I'm currently coming out of the Mac into an iMic, which allows me to use the DAC in the Mac but bipass its headphone amp section. From there I hardwire to my headphone amp.
On the way is a Trends UD-10 digital transporter, that turns USB to coax, optical or digital balanced output. That will allow me to connect to any DAC, and to my digital receiver. It also contains a good 16-bit Burr brown DAC, so I can get all audio processing outside of the computer between now and the time I start testing better outboard DACs. Next up is an Apple Airport Extreme where the DSL line comes in (the hard drive goes there and the extreme will send the files anywhere in the house). Then I can access my music from my laptop, with a portable amp, from anywhere in the house for headphone listening, and use little Airport Express boxes to receive the music at systems at audio systems anywhere else in the house.
It's sounding kind of complicated, but it's really not, and I suppose th biggest advantage is that it's inexpensive, because the Mac was already paid for. Well that, and the controller is very cool. It's the laptop, wherever I carry it. So my remote control has iTunes, which I'm very fond of and already used to, plus a 14-inch screen for art, and internet access to the best liner notes in the world.
Tim