Over the weekend I installed Windows Home Server on a spare box that I had. So far, I'm impressed. The interface is very slick. Installation of the client software called the "Connector" is easy. Go to a share on the server and install. All connections and setup are automated from there. The main purpose for the system, backup, is easy. By default all drives and everything but temporary files are backed up. You can configure the backup to exclude any drives or directories you want. Backup was quick over my gigabit network. Backups are scheduled each night between 12:00 and 6:00 am. The server will retain 3 backups by default but you can change this. I haven't yet tried restoration from any of the backups so I don't know how well that works. I'll need to try that before I'm fully comfortable with the system.
The installation takes the first 20gb of your largest drive and installs the OS on it. It takes the rest of that drive as for the drive pool. The first drive, also called the primary drive, is reserved for tombstone files which apparently mark the location on the other drives where each of the files resides. Reportedly if the primary drive fails, the tombstone files can be recreated from the additional drives. Backed up data is not stored here unless it is the only drive on the system. Initially it was for me but when I added a second drive, the server automatically rebalanced all of the files to the second drive.
There are two sorts of data that WHS handles. There are backup files and there are shared folders. Backup files are more or less hidden from you and are accessed via a special interface. Shared folders are network shares that can contain files, music, photos, etc. Each of the shared folders can be set to be duplicated across the drives or be left as a single instance. As near as I can tell, the backup files are not duplicated. If someone knows differently, please let me know.
When drives are added to the system, they can either be made part of the storage pool or kept separate. If separate, they act just like any drive on a windows system. If made part of the storage pool, they are virtualized into one large drive. WHS will balance files across the storage pool and can be made to create redundant copies of any file folders you designate. Drives can be removed from the pool if there is space to move the files to other drives.
The server is extensible via what are called add-ins. Installing add-ins is done by copying them to a particular shared folder. After that, they show up as available in the server console. Installing them is just a few clicks. I've found two that are very useful. Whiist allows you to create simple web sites. The Duplication Info add-in shows you which drives duplicated files are located on. It can also be used to see what sort of files are on each drive. By default WHS treats the pool as one large, opaque virtual drive. This lets you penetrate that barrier and see how the server is utilizing the space.
I have visions of making my storage pool be a Drobo. I have a Drobo on order. I'll see if it works at all in this role.
Overall I'm very impressed with Windows Home Server. It's not designed for those who want to be able to turn every knob but for the fire and forget crowd, it's great.
Note: I'm not on the WHS team and don't have any inside information so don't take anything I say here as canon. These are just my observations.