The Windows Home Server has a lot of possibilities; after the jump, we go into a few of those--and if you have any thoughts to add, definitely do so in the comments.
One key thing to note is that the hardware is made and marketed by many different companies, just like PCs are, and that the software is Microsoft. And for PC users, this could be just the ticket for integrating and accessing files all over the house, from multiple computers, through your Xbox, printing to a single printer. The files include music, movie, photos, games and of course, file-files like Word Docs.
The best places to start to learn more? Start on Microsoft's Windows Home Server page for ideas on integrating your home technology together, and then head over to Engaget for insights into the hardware models available.