I just wanted to give props to the guys who ported the slimserver extension for FreeNAS. It took some playing but i am very happy with my setup now.

I built the entire box for under $300: (Including an 8 port Gigabit Router)

Mushkin Enhanced Mulholland 8GB USB 2.0 Flash
Western Digital Elements 2TB Desktop External Hard Drive WDBAAU0020HBK-NESN
Crucial 2GB (2 x 1GB) 240-Pin DDR2 SDRAM DDR2 800 (PC2 6400) Dual Channel Kit Desktop Memory Model CT2KIT12864AA800
Intel BOXD510MO Intel Atom D510 Intel NM10 Mini ITX Motherboard/CPU Combo
APEX MI-008 Black Steel Mini-ITX Tower Computer Case 250W Power Supply

If you go with this combination of hardware note that the ram must be "normal" profile, you cant get any of that tall stuff or the HDD will hit.

The 8gb Drive is my boot drive with the OS, and the 2TB is formatted UFS for the music. The 8gb drive is Fast, but not "HDD fast". I wanted an SSD to be able to rebuild the system if something happened and not have to format my music drive. I would recommend this configuration because it takes a non-trivial amount of time to xfer 1.3TB of music and rebuild the squeeze database.

If you want to use large WD Green drives you must use FreeNAS .0.7.2 or newer because of the 4k clusters of the newer WD harddrives. There is quite a lot of information on it over on the FreeNAS forums.

I actually have everything setup such that the box boots up on WOL Magic Packet command from the Squeezebox remote. (All i do is power on my Duet remote and Try to connect) It takes about 3 minutes, but i can live with that. Once on it draws 22 watts Idle and 34 Watts full load, (about 29 playing music).

Xfer rates to and from the box hit 55mb/s.