I personnally use a Squeezebox from SlimDevices
http://www.slimp3.com/
I love it, it fits my needs very well. It is a bit on the geek level of things, the community and company are a very active and growing. Every week something new seems to be happening with them.
Features I like about the Squeezebox:
It has Coax and Optical digital outs (along with RCA analog and a headphone jack)
You can get the cheaper wired only model or the wired/wireless model.
The server software (which you can download and use for free) works on Linux/Windows/Mac and I think even BSD. It is perl based(may change soon) and open source so people are very active in working on it and making new features.
The squeezebox currently supports natively RAW PCM or MP3, what this means though if you have the codec on the server it can transcode on the fly from pretty much ANY non-DRM format and play it on the Squeezebox. I personnaly have ALL my music in FLAC which is a lossless format. Not though some people have issues streaming PCM to the SB in wireless, I have not though.
It is small, and does NOT require a TV.
I like the interface and find it is very easy to use.
It supposedly works well with iTunes, I do not use iTunes so I do not know. However it will not currently work with ANY DRM files like the ones you can buy from iTunes. Fine with me I think music with DRM is crap.
Squeezebox is quite, no fans, no drives.
About ripping and encoding music. You have a good size collection, you will only want to do it ONCE. I would highly recommend using a lossless encoder such as FLAC. You do not get the small file sizes as mp3s but you get files that are idenitcal to the original and can transcode them to ANY future format without suffering generation loss. Also I recommend using EAC for doing the work, great little tool for ripping and encoding. 800 CDs in FLAC format will require ~270 GB of storage.