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I’ve gone down this same path. I started with an Slug but found that it didn’t handle large libraries very well. I then tried the Linkstation Pro. I liked this option much better than the slug as it had much better throughput and was a single device solution. It also worked great on my gigabit wired backbone. I have a 43,000 title MP3 library and a nearly 18,000 title FLAC library; the Linkstation Pro took nearly 20 seconds to return an artist list on the larger library, but it handled FLAC transcoding wonderfully. I had 5 FLAC-to-Wave streams running simultaneously without issue. I looked closely at some of the low-power, small form factor solutions but they were too costly. (Shuttle would probably be my first choice if I had the cash).

I tried various desktop solutions from an old Dell Poweredge Server (too big) to a Compaq iPaq (too noisy – but only $50 on ebay!). I ended up buying a Dell Optiplex SX270. This is a fanless PC with an external power supply. I’ve heard it described as a laptop repurposed as a desktop. I bought mine on ebay for $150. I loaded Ubuntu on it and it offers the kind of performance I was hoping for. I get my artist list from the 43,000 title library in 2 seconds or less.