Baroque_lover, the Mac Mini route is the way I went. I've got a massive NAS RAID setup with the library on it, and run iTunes via a Mac Mini with a BT keyboard and mouse.
I'm actually thinking of going another route, however. I figure I can pick up a fanless small form factor PC--something like a Sumicom or Serener XP box--for relatively cheap. I can run iTunes off a windows platform, and use a USB audio output device the way I do with my Mac Mini. The benefit of this route is that I can dust off an old 10" viewsonic airpanel--an 802.11 wireless touchscreen display--and run a remote desktop for the PC--having iTunes control while on the couch in touchscreen form.
This also gives me the option of tacking on some USB/RS232 converters, an IR generator, and running Mainlobby and Girder to consolidate all system control functions on the airpanel. Think of it as a 10" color touchscreen wireless remote with iTunes control...