I have listened to music on a decent-to-good rig for as long as I can remember, save about 10 years when my kids were young, money was short and I had very little time. So, iTunes / computer-based servers hasn't changed the fact that I listen a lot, but it definitely has changed the way I listen.
I love the spontaneity of a song just "coming on", and putting a music server on random play does just that. It is easy to filter the possible songs down to the mood of the moment. It's also easy to find a specific album or artist. I haven't taken it this far, yet, but all the talk of liner notes on albums always makes me think about all the information that can be linked to the music - cover art, reviews, descriptions, song listings - basically anything you could want to know. Put it up on a TV, a computer monitor, a handheld remote.
I believe it is pretty easy to set up, and I think there are few, if any, sonic penalties to such a setup, assuming an excellent DAC. As others have said, you get rid of walls of CD racks, which you may or may not find desirable.
I still have racks of CDs, but don't keep anywhere near my whole collection "on display". I have CD binders of CDs I would likely never listen to standalone. As somebody else said, HD space is cheap, so when I buy one 500Gb HD, I buy two, and always keep a backup.
It is cheaper, more functional and more flexible. If I'm giving up a smidgeon of absolute sound quality, and I'm not convinced I am, it is easily worth it.