A detailed blog post which covers hardware and software choices.
For the hardware, I ended up with a fanless MiniITX motherboard Intel D510MO, which has a Atom processor, Gigabit ethernet (all my home network is Gigabit, so it does make a difference). I am also using a 2GB 800Mhz Kingston RAM memory, and both two SATA connectors. The MOBO has up to seven 2.0 USB and one mini PCI Express, in case I want to add more SATA drives in the future.