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I just installed a Linksys WUSB54G* in my music server and it works like a charm and was very easy to set up. It is a usb adapter which allows you to place it on top of the computer (or anywhere the cord will reach). I also use a Linksys WAP54G access point and another configured as a repeater. Not totally painless to set up but that was mainly due to my ignorance about such things. If you do decide to get any or all of these feel free to PM me with any issues you may run into as I probably can help you out. *Compusa has these with a rebate that will save you $20.00.
You are correct, the wireless card allows you to dispense with the cable to the music server. The most likely scenario is to locate a music server machine far away from the squeezebox or your home office. If your router is next to your server PC and you leave it on all the time, it's not as useful.
By the way, I picked up a 250GB maxtor drive at CompUSA for $60 (after rebate). It was one of their post Thanksgiving specials - I don't know if it's still available.Chad