I'm doing about the same thing, though my overall capacity is much lower due to the fact that I haven't been able to upgrade my 5 750gb drives in a few years. However I went to an external enclosure (Venus T5 from Newegg) and raid5. If the box is in the house, yeah I can see how you might not want an external enclosure next to the tv. However, once you stick it in the garage, that becomes moot. Who cares what it looks like in the garage? Run some cat6 to it, put a gigabit switch on the network (or 2 or 5) and enjoy having a nice, quiet living room. I'm using boxee boxes as the media frontends - one actual dlink box and a pc running ubuntu and boxee.
I personally hope HD prices start to drop sometime soon, I'd REALLY like to upgrade those drives but can't justify the prices right now for the size I'd like (at least 2TB).