Separate music PC Seems to be a good idea.
I am a newbie in computer audio & have never seen a squeezbox. I have only read about it . But this is what I thought and I am trying it at present.
Can one consider a Netbook in place of squeez box?
1)It has WLAN Capability
2)Good hard drive size(250Gb),
3)You can choose software of your choice like foobar/J river to play your media
4)Can play internet radio
5)Can play youtube videos
6) You don't have to bother about the file format
6) cheaper than squeezbox at 16-17k in india
7)If needed,it has many of the functionalities of a laptop PC (except optical drive) like transferring data from one drive to another, trying newer media players, chaging settings in the playback etc which is probably not possible on squeez box
8) Better screen that squeez box at 10".
9)wireless keyboard cum mouse like Lenovo 5901can works like a full function remote. I am using it.
Lenovo - Keyboards & Mice - 57Y6336 - (US)
Cost Rs1.7k in India
10) Streaming video over WLAN and projecting it through screen /projector.I have not tried it myself but i think it is possible. I don't know whether Squeezbox can do it. WD TV can do it but then there is no screen of WDTV itself.
Only place where I feel squeezbox scores better is the DAC.
I am going to try creative x fi 5.1 surround USB sound card to overcome DAC Problem. I know its not a great solution but that is what i can afford now to improve over the onboard sound quality.It is supposed to give decent quality on stereo analogue out and 'optical out' is there in case I buy a separate DAC in future.
My computer use is so less that my HP mini 210-2090NR is the only computer in my home and I use it with N300 Dlink wireless router. It has twin antenna and signal strength is very good in all rooms of my home. My main use of netbook is for playing music.