I have a little experience of these:
Setup 1 - Buffalo Terastation for storage, Slimp Player for music connected to a normal stereo, PixelMagic MB100 for playing files from Terastation (will play XVID, DIVX, DVD, HD), XBOX 360
Setup 2 - Windows XP with 1TB external USB drives, Media Center PC for playing films in lounge, Kiss DP1600 for playing films in bedroom, connected using Devolo AVDesk which does ethernet over normal power plugs
It really depends on your budget, your house, what equipment you already have etc.
If you need any particular advice let me know.