Set up a media server and backup

I hope I picked the best community for maximum exposure to this set of questions:
I want to build a video distribution system.  I have teh ability to send audio throughout the house and HD video via 2 CAT 6 in every room.  From my research and being an Apple fan this is what I am thinking about doing.  I am considering not using the CAT 6 for video and using wired or wireless connections at one of several locations to get video and other media.
Here is what I have:  Airport Express (extender mode), Aiport Extreme, Netgear Gigabit switch feeding the wired locations.  I have some older WD MyBooks connected via the network and a USB 500GB drive connected to the Airport Extreme for Time Machine backups - of just my MBP, not my wife's MBP. 
1.  Should I buy a Mac Mini to act as the media server for the house?  I suspect I could have 4-5 locations at once demanding media via Apple TV or xBox 360 (via connect 360).  I would like to not buy more than 1 Mac mini.  I have considered stuff by Request Media and they are really expensive compared to the cost of one or even two mac minis.  
2.  I want to have all of the media stored on a RAID 1 network attached drive (or Firewire, Thunderbolt, USB 3.0 whatever).  I also want to be able to backup the computers in the house to this storage too.  Possible?  Lacie seems to have a good product, but, pricey.
3.  I suppose I could put a large hard drive in the Mac Mini and store all the media there and use the RAID 1 system to back up all computers somehow.  It seems Time Machine freaks out when more than one computer backs up to the same drive.   Is there a better way than Time Machine?
In essence I want to put together a system that supports media distribution via multiple streams via wired or wireless network connections to 3-4 locations simultaneously, backup everything, and store everything video and audio and I am looking for recommendations. 
Thanks many!

tonydutt wrote:
1.  Should I buy a Mac Mini to act as the media server for the house?  I suspect I could have 4-5 locations at once demanding media via Apple TV or xBox 360 (via connect 360).  I would like to not buy more than 1 Mac mini.  I have considered stuff by Request Media and they are really expensive compared to the cost of one or even two mac minis.  
As previously stated, iTunes libraries cannot be accessed
simultaneously by to different computers.  This would pretty
much rule out having an Apple TV and other Mac(s) using
the same iTunes library at the same time.  Unfortunately,
Apple TV needs iTunes for any local network streaming.
However, ther are other ATV type devices out there that can
access files directly on any network storage.
There are also other media apps (PLEX, XBMC,etc.) that
can simply be set up to link to network storage systems.
Personally, I am using XBMC on my Macs and all are
linked to media files that are located on HDD attached to
my Airport Extreme Base Station.
2.  I want to have all of the media stored on a RAID 1 network attached drive (or Firewire, Thunderbolt, USB 3.0 whatever).  I also want to be able to backup the computers in the house to this storage too.  Possible?  Lacie seems to have a good product, but, pricey.
There are various options here.  Something to consider, is
LaCie's Thunderbolt to SATA adapter:
http://www.lacie.com/us/products/product.htm?id=10574.
You could then get one of OWC's RAID enclosures w/ SATA
interface and roll your own storage.  Advantages of this approach
1.  The RAIDs will be hardware RAID.
2.  You could have two independed RAID systems attached
      for various reasons or puposes.
3.  Higher speed disk interface vs. USB3.
4.  You can also install highest speed HDD's available if
      desired.
5.  If a a single disk drive goes belly-up, replacement is fast
      and easy.
6.  Also, upgrading to larger drives is a matter of just swapping
     the HDD itself.
3.  I suppose I could put a large hard drive in the Mac Mini and store all the media there and use the RAID 1 system to back up all computers somehow.  It seems Time Machine freaks out when more than one computer backs up to the same drive.   Is there a better way than Time Machine?
With this sort of system, I would avoid putting data inside
and libraries inside the Mini.  Should the HDD fail, your whole system
and data will be down.  I would suggest get a Mini with a single
SSD drive with OSX and install Server on it.  Being solid state,
it will in the long run be more reliable than a mechanical HDD.
Then put all data and libraries on external storage.  If any of
the data/library drives fail, repair/replacement will be quick
and simple.
For your purpose, you don't need to by the "Server" model.
Just get either the base or next one up and just install the
server app on it.

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