Adrian's point - and it is a valid one, if you know anything about what the "typical" home user might do and buy - is that your average Joe or Joanna isn't going to march out and splash a few hundred quid on a box to back up all their home PCs, even if they've lost precious data before.
In an enterprise IT environment, disaster recovery has often been treated as a second-class citizen, until a disaster actually happens - after which point, it's properly factored into things. I vividly recall making the case for DLT drives over DAT over 10 years ago, yet on cost grounds alone it looked like DAT could do the biz... until the crunch came, a disaster happened, it looked like the DR plan wasn't quite up to scratch, and after that it was easy to get money to do DR properly.
Sad to say it, but 9/11 and the London 7/7 bombings in 2005 probably helped a lot of organisations realise that backup (and more importantly, recovery) was actually worth spending a bit of time & effort on. You only realise how important it is to have a contingency plan, when you're faced with the real need to have - or to show you have - one.
As an aside, if you haven't seen it yet, Microsoft announced Data Protection Manager 2007 recently, as a means to snapshot and backup various systems to low-cost disk backup. DPM could allow you to backup not just file systems, but Exchange, Sharepoint and SQL Server, using VSS snapshot technology. We're now using it internally to back Exchange up to low-cost SAS drives, as well as other things.
I have a buddy who's known as "Foggy" (from "Foghorn Leghorn"), so called because he had a loud voice on the phone when he first joined Microsoft in a Product Support Services role. If you're interested in DPM2007, just let me know and I'll put you in touch with him - he's "Mr DPM" in the UK and is keen to tell everyone just how good it is.
Back to Home Server. I've been beta-testing the "Q"/"Quattro" product for a while, and I think the finished Home Server looks really good. Have I got one at home? Yes. But then, I only have one other PC at home (besides the corporate laptops that occupy the place, and a few old machines that spend most of their time powered off) so I'm not sure I'd shell out for a Home Server (when they're comercially available) just to protect that one box, and serve it content.
What I'd wish for Home Server
I'd love it if Windows Home Server could be a Media Center - ie I could whack a couple of TV Tuners in the WHS box, and it would stream that content to other PCs or Media Center Extenders around the house. Think of it like a Windows Media Center Server, if you like. I might even think about sticking the box in the loft, next to the Coax-amplifier which distributes TV signals around the house - especially if Bluetooth or WiFi remotes from around the house could control the Server, making the MCE experience available on remote PCs, Extenders and directly on TVs themselves.
I'd also really like some OEM to bring out a device which was hardened and much more appliance-like, maybe with some other features - I'm thinking like a box which had a Powerline-ethernet style built-in power supply (and corresponding remote adapter(s)) which would mean I could stick the box anywhere there was power and not worry about signal or CAT-5 cabling back to the wired/wireless network that all the PCs are on. I was thinking it would be quite cool to have a Windows Home Server in the garage. My garage is separate from the house (by about 6 ft) so if the house burned down, there is a chance the garage wouldn't (though there's probably enough combustible material in the garage to make it happen the other way around).
I thought if I could put a WHS in the garage, it would mean I wouldn't need to cool the box much (even in the summer, the garage is going to be cooler than many places, and in the winter, it's positively COLD) and apart from the odd spider invading the box, it'd probably be pretty hazard-free.
So in an ideal world, a Home Server would be a solid-state box with no vents or fans, which can draw network access through its power supply. There might be one company - Tranquil PC - who'll be able to offer this nirvana sooner than most. Tranquil PC have some very interesting fanless technology, but for a regular PC there's a payoff in terms of performance (ie to run their box cool enough so it doesn't need a fan, it's not exactly cutting edge) and price (there's a premium for the design and low-volume nature). For a home server, you're not bothered about quad core processors with 8Gb of RAM, so Tranquil's offerings could well be in the sweet spot. Time will tell if the price point people are willing to pay will match these expectations.
Coming back to the ZDNet article - Adrian reckons that the average home user will spend $30 on backup. I know I've had hard disk failures but probably only back up to the USB disk I already have, every couple of months. Who's going to buy Home Server this year, in time for Christmas? Tech-savvy folk who have multiple PCs at home, I'd think - maybe families where each of the kids have their own PC, but not exactly the less tech-literate types.
Maybe the time for Home Server is when it can not only stream data to remote devices, back them up and make sure they're appropriately patched - but when users in the home can have the Home Server record stuff from the TV and distribute it directly to their device for later viewing.
Maybe that's v2 functionality, who knows?