AMOFW,
Thanks for that -
I'd go with the latter if I were you. In fact most of these devices run a cut-down file-serving optimised version of W2K3 server anyway!
With the original setup, you would have share-level access only within a workgroup, as there's no DC (or AD more accurately), which is little benefit over just having all her files on one of her PCs and leaving it on all the time (like a server) so that they can be accessed from the other(s).
I suppose noise could be an issue, but I can put up with a lot of background noise for £400 +!
What I do is have a large hard disk in a USB 2 caddy - plug it into any PC (running Win2K and above) and Bob's yer proverbial.
But if you've got the dosh...
Cheers
SD