I've been doing something similar for nearly a decade now. I started with a D-Link DSM-520 media streamer, then a WDTV, but eventually moved to XBMC and a custom built box to get the media compatibility I needed. Basically...
- The first rule of Netflix streaming is that they won't have the movie you want to see. Ever.
- WiFi is not a good option, especially for streaming HD video. You don't want the thing stuttering when you bring a date home or your kids are screaming for Finding Nemo.
- Streaming over NFS seems to have the best performance. Streaming via HTTP was unreliable, as was DLNA, MiniUPNP etc.
- Gigabit ethernet is your best option. Wire everything you can. If you can't get ethernet, use powerline networking.
- Don't cheap out on your hardware. I spent the money to get a 4U chassis with 16 3.5" hotswap bays, SAS backplane and redundant power supply. It sounds like a freight train but the reliability has been very, very good.
- Redundant storage is absolutely necessary. If you add up the time it takes to compile your media collection one video at a time, a storage failure could take months and months of downloading or re-encoding to recover from. There may even be some exotic content that just isn't available any more. If you are serious about it then you will find yourself using so much storage that a true "backup" is very expensive or even impossible, although with 3TB and 4TB drives available now that is not so true any more.
- Don't be afraid to rip and encode yourself. MakeMKV is a great piece of software and allowed me to remove AnyDVD HD from my workflow, which significantly streamlined the process. If you are handy with scripting, you can almost automate the entire process. I've automated the ripping process and the encoding process, but have not bothered to bridge the two yet... DVD's are apparently created by a team of monkeys and the disc structure is frequently completely broken. Blu-ray video tends to be very well done, but the audio streams vary and sometimes the discs are mastered with a bunch of fake stuff to "foil" rippers (I'm looking at you, Disney).