Just a small suggestion but you can also buy MiniITX form factor boards that support more powerful CPU's, such as Intel's Dual and Quad Core chips (not sure about the newer i series CPU's though). Granted it will pump your budget up but then you would also get quite a powerful setup in return.
Also the Atom's with Nvidia's ION platform built-in are quite effective.
I need some thing just serve files
Why not get a NAS (Network Attached Storage)?
Here's an example http://www.amazon.co.uk/Netgear-Sto...1?ie=UTF8&s=electronics&qid=1280319934&sr=1-1
Comes with 1TB and goes on the network... very easy, and much cheaper!
I have NAS box already but I have to manually do the backup and no itunes interrogation etc.
I'm going to wait for the next ver of home server to come our and buy the HP box. How ever I look it it's going to cost me around £600+ to make it (including the drives) might as well get it from OEM so I'll have warranty etc