Shawn’s guide is great, but he really didn’t go into the hardware that can make such a rig really sing.
Storage
If you want a lot of storage, and want it to be redundant, look no further than the NewerTech Guardian MAXimus. I’ve got several of them floating around at work and home, and the simplicity is just great. While hardware RAID shouldn’t be considered a backup, having your movies and music on two drives instead of just one is a good step in the right direction.
If you’re using a Mac to host your files, then an SSD can make your whole setup faster. I’m using a 512 GB Crucial m4 in my MacBook Pro (and home Mac mini), and simply love it. SSD prices continue to fall, but they are well worth the money today. I can’t go back to a spinning hard drive.
Don’t buy a NAS to use with iTunes. Ever.
Network
If you’re going to be slinging a lot of data around your house, you can’t beat a wired network. Gigabit switches are cheap, and play nicely with any router out there. I’ve had good luck with this one in the past.
Of course, AirPlay is a growing presence in setups like these. Apple’s Airport Extreme is the best consumer-grade wireless router on the market today, hands down. It’s easy to setup with most ISP-supplied routers.
(If you don’t spring for an AirPort, at least get something dual-band.)
AT&T’s U-Verse router is a locked-down piece of junk, though. Thankfully, this Macgasm article has tons of helpful information to get the box to play nicely with an Airport.
When in doubt, run some Ethernet. That’s my motto when it comes to these things.