Digitalmeisters - Thoughts on Olive.....

You're right, there is going to be a LOT of dust in this area over the next year or two (at least). I think if I were going to get a stand-alone music server right now and didn't want it to be real fiddly, I would go to Sound Science and get one of theirs. I've never dealt with them but Neal seems to have a good reputation for knowing what he's doing, treating people right and selling very good products.
[/url]http://www.soundsciencecat.com/MusicVault.html[/url]

All this being said, I have a Logitech Touch right now and it's a lot of fun. I'm just waiting to see where everything heads. Many companies are getting into this area now in various forms (Bryston, Naim, etc.) so it should be fun!

Do you need any special kind of software to do this? Perhaps my questions are so basic that I am going to have research the rudiments here.

There are plenty of free programs out there to do this. EAC is a very popular one that tries to correct for read errors and make sure you get a good rip. However, I just purchased a copy of dbPoweramp ($38). It has multiple methods for ensuring a good rip but the thing that sold me was the fact that it gets metadata from up to 5 different databases and compares the information attempting to make sure it's accurate. There's a lot of crap in the metadata databases and making sure you have accurate and correctly spelled song titles/artist/album name is a HUGE investment in time.

Pubul57,
You're right. This will need to become more standardized and easier for this to take off ... and I believe it will. As an example, compare how easy it is to purchase and install an app on your smartphone these days with integrated app stores. Something like this used to be a royal pain.

I've given up trying to predict where the computer industry will go next and/or how fast it will get there. I just sit back and am amazed at the pace of progress. This area will be that way too. My interim solution was to buy the inexpensive but VERY good and versatile Logitech Touch. This allows me to experiment with how the music is delivered, different formats and, eventually, different DACs while I'm waiting for things to settle down.

The Touch has been a lot of fun. I particularly like Pandora through my main system. Even though it's not what we would consider hirez, it sounds pretty darn good and I've heard a lot of good music I wouldn't have heard otherwise.

It's a brave new world!