Thanks to all the suggestions I got these few days, I have decided on Windows Home Server for my home backup and storage solution. I bought the Acer easyStore H340 from Canada Computers for $489.99 that comes with a free additional 1TB HDD so in total this system has 2TB. Originally I was planning to reuse my old Celeron that is sitting around collecting dusts, but the store won’t let me purchase an OEM copy of WHS unless I buy hardware from them (a system builder). It’s kind of bizarre for MS to sell just OEM version of WHS because I thought MS intention is for enthusiasts to re-spec their old PCs. Price is a sensitive issue here since they are competing with the NAS solutions out there. Anyways, I don’t think I can build a comparable system cheaper than this Acer box that I just bought, and I don’t have an immediate need for another desktop PC so I went with this.
Once I figure out all my backups and iTunes I’ll write more about this.