Music Server vs. PC vs. Transport vs. ?

I don;t really want to add another rack in my living room. If I do, I may end up sleeping on one of the couches. Ideally, I would like to do the following:

1. Either use a pc or a server to store discs and have them accessable.
2. Have a way for the kids/wife to hook up their ipods
3. Have a way to get digital radio (xm, sirius or even computer streaming, doesn;t matter)
4. Do all of this WITHOUT degrading the sound quality ( i know, the ipod, by definition will do this)

My understanding of most high end DACs is that they do not have USB ports, but that is the ideal port to use to negate jitter. As I was researching this, I got the latest issue of the absolute sound, and they address some of this a bit. My feeling seems to be that one pays a HUGE premium for a server, that both their DACs and PCs DACs suck, and one has to get a USB to AES or other adapter, and still use an external DAC. It also seems that if one is willing to use a lossless system, that the universal opinion is that a hard drive rivals or beats any transports.

So my initial thought would be to get a pc with an ipod dock, run lossless, get an additional adapter say from Wavelength, and use the current dac. That adds at least two pieces, maybe three.

Help?????
Thanks,
Chris

Help??????

Thanks,
Chris