I finally got my hands on the RC version of Windows Home Server, and so far I really like it. When I had my house built in 2000, I had CAT5 Ethernet and RG6 coax cable run to every room, and I actually built a dedicated server (running Windows Server 2000 back then) in the basement, complete with an Active Directory Domain. Since then, I have upgraded to Gigabit Ethernet switches, and Windows Server 2003. My old server was basically used as a file server, with about 2TB of storage for media files, software images, etc.
Windows Home Server will be a much better solution, for automatic backups and the ability to very easily add storage capacity to the server. The screen shot below shows a network back-up in progress. So far, so good!