Shadorne, from personal experience, I can state that you get more compression out of Apple Lossless than you indicate. I just ripped 1,000 CDs, and it fit in 260 gb. So each gb of storage will get you about 4 CDs. Put another way, a CD stored with AL takes up about 40% of the space. If the typical CD is 600 mb, then you need 240 mb of space.
FWIW, I can second everyone's positive experience with hard disk servers. I have an Apple iMac G5 feeding a Wavelength Cosecant (a USB DAC). I have never heard digital as good as this, including the Denon/Exemplar CD player (a very fine unit) I traded out of. -- David