The Sony Music Server has the built in dac. It also has a digital out in case you have a better dac you want to use. You are correct that you would need an integrated amp or amp and pre, and a set of speakers.
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This question gets asked often, although generally on the PC Audio forum. There is a recent thread started by Smrex13 (his first one, titled help a real newbie) you might want to check out. He was starting with an Apple laptop, though, hence different software was recommended.
Here's an attempt to try and help out with the simplest solution I can think of with what I would expect as good sound. You already know these are all balancing acts, so maybe what I think is the balance between complexity and sound that you expect is off mark and your feedback will help us adjust to your needs.
Start with a dedicated computer, meaning it will only be used for audio. We could go on and on about optimization, but I think not now. FWIW, I started with a dedicated Win XP laptop.
Playback software: there are many to choose from. I use JRiver and works great, and intuitive to use. I'm now looking into HQ Player that is said to sound better, but also needs additional hardware, so I wouldn't recommend that as a starting point.
Getting the info out of the computer is a critical link. USB is generally how people do it, and there are two types of USB inputs implemented on DACs: synch and asynch. Synch just has the computer use its clock (not a very good one) send data at its rate and the DAC receives data at its own rate...not the best implementation. Asynch, on the other side, slaves the computer to the DAC clock, which is far superior, leading to better sound. There are exceptions, but this is a general rule.
You can connect your laptop to an asynch USB DAC and call it a day.
Music storage is important too in the sense of how it will connect to the computer. If using USB to get the music out of your computer you don't want to use a USB hard drive to store the music. USB means universal serial bus, and being serial means that data transfer in and out are in series, apparently increasing jitter. A USB hard drive will still work, mind you, just not sounding as good. I used this for a while when I was getting my toes wet in computer audio and was happy then.
And I think you are set to start. Generally the wifi built into the computer is electrically noisy, so turn it off when you don't need it.
Needless to say there are endless improvements you can look into later, but learning first if computer audio is something you like enough is a sensible way to move forward, in my opinion.
As far as ripping your CD collection, I recommend you read the Computeraudiophile Guide to Ripping CDs. I follow it to a t and works wonders. It's cumbersome to set up the first time, but later you just insert your cd and the rest is automatic. I store my CDs in wav format and playback from that format, but also make an automatic copy to Apple format and flac. Do spend time upfront on this so you don't spend a lot more time on it later on to undo/redo stuff.
FWIW, my system is now a headless/fanless Win Server 2012 PC significantly optimized for audio only, running JRiver, into an Audiophilleo into a Metrum Octave, into tube pre and amp. I'll be happy to discuss more complex setups, but I wouldn't recommend such a thing as a starting point.
Enjoy the journey!
The Sony server is quite excellent for the money, however I would look elsewhere for the amps/preamp and speakers.
If you want a stellar sounding system that is simple to use and not stupid-expensive, I would go with the Sony server, a good tube preamp or passive transformer linestage (called TVC) and good amps, preferably monoblocks. A wonderful sounding amp and a great value is the Wells Audio (wellsaudio.com). A good preamp is the Jeff Rowland or a used Acoustic Research tube. A good passive linestage is the Music First.
Speakers are a no-Brainer. Vapor Audio (vaporsound.com) are simply the best sounding and the best value.
Not sure what "increditable" means, but I'll take it as a good thing :-)
Don't complicate things upfront. You run the risk of analysis paralysis. Start easy with your laptop and a DAC, then go from there if you find it appealing. There are so many approaches (system strategies), options for each component(software, operating system, DAC, etc), and parts within the components that it's very easy to end up going nowhere. It is indeed a technology under development and as such the best path is not clear at all. But that shouldn't prevent you from trying it and see what's all the talk about.
I tried some things, and others haven't yet. But it's good learning. I couldn't be happier about sound, but it is still quite quirky for a non computer whiz like me.