Magic_x_uk - just saw your post on the HP Proliant Thread (
http://forums.overclockers.co.uk/showpost.php?p=19440296&postcount=1732)
You might want to clear up exactly what you're trying to do as you've started mentioning running XBMC on the Proliant or your NAS.
Sorry if this is pointing out the obvious but NAS stands for network accessible storage. To answer your first question there is no real limit on how many NAS's you can put on your network. That's like asking how many PC's you can have on your network.
(obviously there is a limit and technically mraerosmith1981 is right but consider it unreachable)
Most NAS boxes are just simple PC's that usually run some custom OS of the Linux variety. However they will not have any sound card or video card and will usually only have an Ethernet port to connect it directly to your network. Configuration will be done via a web based interface that will be pre-installed and run by the tiny OS.
It is sometimes possible to replace the OS on these NASes with something like FreeNAS which is an open source OS that provides some cool extra functionality.
People are recommending the HP Proliant Server as it actually works out as a very cost effective NAS when repurposed that way. It's RAM, CPU and four HDD slots make it comparable to some top of the range NASs.
It's a server so it comes with on board video, space for a CD ROM and expandable RAM. All this for £140 (when you get the £100 cash back).
If you choose to just install FreeNAS on a Proliant server you will have a very good NAS.
If you choose to install Windows Home Server on your Proliant you will have a very nice server with some nice NAS functionality as well - but you will need to spend another £100 to buy the OS of course.
You will not be able to run XMBC "on" a NAS but XMBC can connect to a NAS to access it's files. If you want to connect your Proliant server to a PC then yes, it could "handle" XBMC but has no built in sound card so you would have no sound. You would have to buy one to go into one of the free PCI slots.
Sqeezebox can run on a number of NAS drives (
http://en.wikipedia.org/wiki/Squeezebox_Server#Server_Hardware_and_Plugins) and the HP Proliant server would also be able to cope with this.