Work in Progress Server Spec help and other info....

I am in need of a better solution for my HTPC needs, I like the idea of building my own Server to serve up DVD MKVs and HD MKVs to possibly in the future 2 or 3 clients but right now its only needed for 2 clients. The server would also have our music collection and photos on, and be accessed via XBMC and MediaPortal , recordings from tv will hopefully be shifted to the server for playback and so I don’t need huge HDD in the client pc in the living room which will still hold the TV Tuners.
From years gone by I have an old spare case a Cooler Master CM Storm, Sniper, I would presume I could use this as a decent server case for serving up the HD content and music etc.

Ok so my current living room has the following specification

Amd A10-5800K Black Edition (with onboard 7660D GPU)
Gigabyte F2A75M-D3H
8GB DDR3 LP Corsair
3x Seagate 2TB HDD and an external 1TB Western digital
1x TBS 6981 DVBS2 dual tuner
Silverstone LaScala LC 17 Rackmount HTPC
With a HP MCE Remote
oh and a Blu Ray Drive
running Windows 7x64, MediaPortal, XBMC, MakeMKV,

All feeding to a Yamaha AMP via HDMI which can do up to DTS but no HD audio and then onto the TV again via HDMI, a Panasonic Plasma TX-P42G15B
The wife has got a place at University starting in September and so need a machine that can be used in her now new study (was a third bedroom) , for accessing the music on the server and for her research and homework which she will no doubt have shed loads of.
I have read so much my head will soon spin loll, I was thinking along the lines of windows 7 x64 and drive bender which from what I have read will offer a backup situation, where if a drive dies In the server it can be replaced easily as the info is kept twice as such on the HDD as long as i have ticked the option.
Thinking of using separate HDD for the OS and using an external optical drive to install any bits, or my usb pen which has windows 7 x64 on.
So what are peoples ideas thoughts about my current HTPC and would it be better suited for any other part of my current project? All help welcomed and advice greatly appreciated.

Think that covers most if not all of it, as for £ as little as possible but still capable and expandable for HDD space, max of £800 but £600 would be better

I would keep your HTPC as-is and build a new server from scratch. If you're just serving files you can get away with a pretty low-power setup.

If you want to save yourself a bit of work, look and see if you can find a deal on the HP Proliant N40L. These make for a great little home server. If these had been around when I built mine I would not have built it from scratch myself.

If you're going to use a Windows OS on your server, I'd look at WHS2011. Here it can be found under $50 and it comes with a backup client for up to 10 PCs. It's based off Windows 2008 R2 which share a lot of underpinnings with Windows 7. It has a nice dashboard application that makes life really easy. Mine has pretty much been set and forget. DriveBender has a WHS2011 version.

If you do want to build your own, I've built mine with the following:
Lian-Li PC-Q08 case
FSP GHS-R 300W SFX 80+ Bronze PSU
ASUS E35M1-I motherboard (6 x SATA!)
4GB DDR3
64GB SSD for the OS

and then I have various hard-drives for media. The E35M1-I isn't really easy to find these days for good substitutes are the ASUS C60M1-I or P8H77-I with a G1610 CPU.

Check out this site as well: http://www.wegotserved.com/