I'm using a windows home server (HP but Asus started making them too). Basically it's a little box that's barely taller than the 4 hard drives it can hold. It's quiet and power efficient. It can centralize and store media files making them easy to share throughout the house but it also backs up the other computers in the house -- in fact it will even wake up a sleeping or hibernating laptop in the middle of the night to do the backup and then put it back to sleep when its done (something that just blew my mind when I first realized what was happening).
WHS doesn't have a concept of "raid" but you can flag folders to be duplicated and WHS will ensure that if it's possible they will be duplicated across hard drives. Adding hard drives is fairly simple. When you add a new one you can chose to add it to the storage pool or to use it to back up the WHS itself. The storage pool is pretty cool, there really aren't letter drives, WHS just maintains a giant pool of storage made up from all the connected hard drives so if you're running low on server space just add another hard drive.
Generally I'm happy letting the WHS backup my laptop and game machine. If anything happens to them the WHS can rebuild them. If anything happens to a drive on the WHS the folder redundancy will keep things healthy. I'd basically have to have a simultaneous, catastrophic loss of two or more hard drives on the WHS to start losing data and the odds on that are pretty long. One of these days I might build a small raid to backup all the media on the WHS but that's low priority right now.
For businesses Windows server 2008 has much the same capacity although it supposedly does image based backups (ie norton ghost, but WHS will do ghost backups as well with service pack 3). And of course apple's solution is time machine.
