Another alternative, if you have a little money to throw at this project, would be the Turtle Beach
Audiotron. It's a small piece of "real" stereo equipment with a remote and an ethernet jack. It simply plugs into your network, grabs files from wherever they are stored, and plays them. It can also read playlists and play Shoutcast streams. Sounds like just what you're looking for, if you're interested in buying something rather than going the DIY route.
I would expect sound quality to be a non-issue, as Turtle Beach also makes a line of well-regarded sound cards and has roots in software and home studio doodads for musicians.
edit: fixed some particularly ugly typos.