I've got a couple of these boxes and really like them. One suffered from a failed PSU after just over a year (a design fault, now fixed) which Netgear replaced promptly despite being out of warranty.

I've got my music collection ripped to FLAC, which the NAS box streams to a Squeezebox with its built-in Slimserver software. I've held off on ripping the DVDs so far, though. Having experimented a little, 400+ DivX rips is going to take a looong time. For now I've solved the space issue by sticking the DVDs in a couple of large CD wallets. Ok, so the search engine is a little more manual than the iPod's Coverflow, but it's a lot more tactile!

For me, the advantage of the ReadyNAS over a homebrew version is the size, relatively low noise, and low power consumption, especially with the drives spun down.