There is a company named Lansonic who is doing just what you describe - a disk-based audio component. It's got an ethernet interface on the back-end, audio-component interface (digital and analog) to feed a stereo system. It looks just like a server on the network, controllable by any other computer on the network. I haven't heard it, but would think reading the CD off the HD would eliminate the jitter issues, etc.
My big concern with purchasing one of these is the controlling software - usually hardware companies who need software write software that isn't up to par. It's not their specialty and it shows. If they ever prove to have the kinks worked out, it looks like a really flexible component. -Kirk