All of it and half decent for $700 might be tough, particularly since HDD prices are still quite high.
Assuming you already have some sort of PC (not laptop), my suggestion would be to focus on getting two HTPCs suitable for your needs and use the PC as file share. Either you have the space already, or you just expand the machine with a large'ish HDD and share it on the network. A variation on that theme is to follow my example and reuse an old scrap computer (in my case a Dell P4 consumer PC) and fit it with a number of drives and a software of your choice and based on your needs (FreeNAS, unRAID, Linux with shared folders etc).
Then do some research and figure out what you prioritize from a playback machine (looks, size, noise etc), as well as decide about build-from-scratch or barebone. One good path could be to buy two barebones and run
OpenELEC on them (XBMC on top of a custom built Linux), which makes for good performance on simple hardware and also saves you some money since it's built to run off a /quality/ USB stick.
Anything from Atom D510+ION2 can stream full 1080 (at least on XBMC Live or OpenELEC), so it's not like you need fancy hardware. I know this since my own HTPC has exactly that configuration.
For inspiration about hardware choices, see
this thread (DIY components). As for barebones, I know that Zotacs are popular and I myself am very content with my Shuttle XS35GT (particularly since it's fanless and thus completely silent with an SSD).