Music server for $160

I recently decided to build a music server. My criteria:
- Must NOT rely on my existing computer, which I use for computational work that does not mix well with streaming. Thus, a new "computer" is needed
- Use my existing DAC (MF VDAC or MHDT Havana)
- Must fit ~800GB lossless

My solution:
- Used 1st gen Apple TV - $50
- New 1TB USB hard drive - $80
- Sonicwave glass toslink - $30
- 5 hrs to figure out how to get the ATV's USB to read the 1TB drive. Result: 1TB ATV music server

My impressions:
(1) For $160, not a bad music server that can be mated to DAC of choice
(2) Playing music stored on the ATV sounds better (e.g., more detailed) than streaming to the ATV. Am I imagining this? Not sure of a technical explanation
(3) Prefer my CDP as
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(3) Prefer my CDP as a transport over the ATV. In particular, I used my Shanling T100 as a transport into the same DAC (MF VDAC and MHDT Havana) as the ATV. I feel that there is a notable difference in that the CDP has better timing (i.e., PRaT). However, CDP was connected via coaxial versus the ATV that was connected via optical. Cables were comparable (i.e., cheap). I am going to experiment with better optical cables for the ATV, potentially, DH Labs. The ATV only has an optical output, which may be a drawback of the ATV solution versus other sever solutions (e.g., squeezebox which also has coaxial or MacMini's USB). Has anyone been able to determine if the optical link of the ATV is potentially a weak spot?

My Conclusions:
The 1TB ATV is my new favorite STAND-ALONE transport that can be had for under $200. This solution seems to be significantly cheaper than the Squeezebox, Sonus, Airport Express, or ATV2 style solution (which requires a computer from which to stream the data). This solution is also cheaper than the MacMini style solution. I do wish that the ATV had digital coaxial output. One caveat: I am not including the cost of an iPhone (or iPod Touch) to use as a remote because I already had one. This is needed if you want to run the ATV without a TV/Monitor.

Any suggestions on how to improve this transport? Re-clock? Toslink cable recommendations?

Also my latest project;

Ebay 1st Gen ATV 160 GB - $85 shipped
Ebay 17" LCD monitor - $40 shipped
HDMI to DVI cable - $70 (paid way to much)

Using an L-cheapo Rat Shack Toslink cable to a Behringer SRC2496. Converting from 44.1 - 48 and connecting via Kimber Orchid to a MSB Platinum Plus DAC.

I can't comment on streaming vs hard cable ( I'm direct cable ) but the sound and convenience is exceptionally good for such a small investment.

I am waiting on a Sys. Concept 1300 strand Toslink - $60
Hopefully an improvement over the Rat Shack.

Now if I can just master the art of obtaining missing album art!
If you like the 1st gen ATV as a transport, then I suggest considering the following:
(1) Pick up a used iPod touch -- the free Apple Remote app is pretty nice and removes your monitor from the equation. Not at all necessary but I really like it. I think Apple sells them refurb
(2) Spent the time to get the USB on the ATV enabled. 160GB goes fast with lossless music. Once the USB is enabled, you can have an ATV with up to 2TB+ capacity
Really like both of your ideas!
Is it possible to run your digital audio out via USB on the ATV? USB out tends to be the preferred digital out on Mac Minis.

Or grab a cheap old Mac Mini for $150-200. Craigslist is your friend.

The USB on the ATV cannot output digital music streams (to the best of my knowledge). There may be a hack to get that to work but that would also mean that I could not use the USB for storage (i.e., 1TB external drive).

I was trying to avoid the expense of a Mini. I have never seen a reasonable Mini at $150-200. At that price point, I think you are looking at the 1st Gen (Power-PC-based) Mini. But thanks for the suggestion -- it's worth some research.