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I have an Apple Airport Extreme and could easily attach a usbHDD to that. Does this solution work well?
Obviously hooking up a USB HD to your AE would be the most economical solution. I have a USB 3TB Western Digital Studio hooked up via USB to my Apple Airport Extreme and streaming to iTunes w/ Pure Music works fine : even with very big DSD files. Maybe it's because my mac mini is hooked up via ethernet to the network (all CAT 6) and not WIFI. There is a pause to load the track, but I think that because I'm using PM w/ memory play mode, not necessarily because of some issue with the WD HD or network. The WD HD can also be seen / accessed by my other mac mini in another room with no problems (also ethernet connected to network).I think the principal advantage with a NAS is getting a 2 or more bay one so you can run it in RAID and have constant hassle-free backup. And swap out to bigger drives if you are a media hoarder and think you'll run out of space. Of course you can just manually back up the USB HD to another, and / or replace it with another if it starts to go bad (though this often happens without warning). You just have to have a bit more discipline, which is worth it considering the probably substantial investment in the media.
RAID isn't a backup, you still have a single point of failure for file corruptions, theft, fire, virus, power surges, etc. All what raid gives you is less downtime in the event that one drive fails, nothing more. RAID-0 has worse reliability than a single drive, RAID-1/3/5/10 will allow you to have one drive fail while you can still access the files, so unless you can't handle downtime, it's not an expense most consumers should pay for. It's a great feature for a NAS to offer redundancy, but if they don't offer a local backup solution of the NAS itself, then it's only a false sense of security
Drive failure is the most likely failure point of all (vs theft, fire, virus, power surge etc). But your point is taken nonetheless : NAS introduce cost and complexity that may be unnecessary for a typical home user. If you want a true backup plan, you need to not only have another copy, but preferably in another physical location, whether that is done via online back up options, or just having a copy on another physical drive at some other place (like office / second or other family members home / or even maybe in a fire proof safe). Most of us don't go to that precaution, but we should.