What's a Media Server? You may consider your Apple TV a media server, but it's more of a media streamer, since it lacks any storage capacity and can only feed material stored on your computer or direct from the internet via WiFi. But there are plenty of devices with a plentitude of local storage and connection options for your home theater and audio setups...
Entry Level: Logitech Squeezebox Touch, $300
This device delivers on all fronts, we like that is pretty easy to use and can integrate itself into an AV system with totally reliable playback of digital audio files and endless supply of internet content. Decodes MP3, FLAC, WAV, AIFF, Apple Lossless, MWA Lossless, APE, AMC. Connects thru ethernet and WiFi and it has a user friendly touch interface and internet radio support. As an added bonus, it comes with built-in Facebook and Flickr.
Midrange: Arris Moxi HD DVR, $499
The only drawback that we found on this device is the lack of accessing on-demand or PPV content; but other than that, this device is superior to the competition in every single aspect. It has scalable storage and some user interface that came straight from the future. This is a Media Server that surprise us in any way; and we have no doubt that will continue to evolve. HDMI output, serves 1080p and decodes Dolby Digital Plus. The standard hard drive is 500 gigabytes.
Budget Hi End: Sonos Bundle 250, $999
The press release states "The wireless that works like magic" and we think that they are not lying. Sonos is the real Mc Coy with a no hassle and a nice integrated way of controlling and accessing your digital library thru your entire house without the pain of running wires all over the place. Pandora, Internet Radio and other sources are supported too. The bundle includes a ZonePlayer 90, ZonePlayer 120 and the touchscreen Controller 200. iPads, iPhones and iPod Touches could be used as an additional controllers with the addition of a free app. This one is the best of the bunch.