If you weren't encoding I would suggest going for one of the pre-built WD NAS's.
They're usually pretty good.
Otherwise I would be looking at something like an i3 or i5 with a low end radeon or geforce.
Maybe even an AMD fusion cpu with some value kingston ram about 2-4GB.
I would stick with passive cooling with the case, maybe something like the 212 with the fan removed. Worked pretty well for me with my q6600 and it's pretty cheap.(maybe someone will chime in with a better option).
As for the harddrives, I would look at the green series from Western Digital(yes I am a bit of a WD fan), with a small capacity SSD for the boot drive.
For the PSU check out this thread:
The guys there gave me some good advice.
As for the OS, I use Windows Server 2008. I managed to get a license for it when I picked up my license for Windows 7.
You could easily get away with using Windows 7 for the nas, just strip all the fancy features from it.
Cheaper option again would be a linux distro, not sure how that would go with encoding though.
A couple of questions.
Do you have a gigabit switch or router?
Are you planning on making it headless?Edited by Cipher - 7/26/11 at 11:42pm