The SB Touch arrived Monday. Haven't tried it yet. Soon. I'll try wireless first and see how that does. Regardless of drop-out issues or not, then I'll try the USB bus-powered mobile drive. And if all fails, ethernet cable.
Other solution: NAS drive connected to Airport Extreme. Would that work? I prefer not to have my iMac on to play music. Is it as simple as copying over the iTunes library and installing the Squeezebox Server?