Many "low-cost" (80-150$) 1 or 2-bay NAS (seagate, netgear, dlink, zyxel etc..) can be "hacked" and the OS can be substituted with Linux. The difference is that they don't have a video output, and I think the CPUs should be more limited (many have Marvell Kirkwood 800mhz-1.5ghz), but they are designed for NAS usage so multiple SATA ports, eventually gigabit ethernet etc..

Having said that, probably the best home NAS could be built out of an HP Microserver N54L: 250$ for an Amd Turion "small" server that supports up to 8GB of RAM (16GB sometimes), it has 4 (non-hot-swappable) disk slots (but there are guys who have installed more using 2.5 disks and the dvdrom slot).

there are plenty of forums and sites showing how to do it, the only downside is that it is bigger (but 4 slots) and it consumes more power

EDIT: I'm still deciding which way to go in order to substitute my old Seagate Dockstar running Debian (and with a single old 2.5 disk attached to one of the USB ports)