NAS

A NAS (Network Attached Storage) is a stand-alone file-level computer data storage device into which you can install one or more hard drives (either internally or externally), and then connect the NAS device directly to your network. The NAS device is given its own IP address and can be configured to share the hard drives and their data contents on the network to multiple client devices, such as XBMC and other computers. With a NAS you do not have to have your computer(s) powered on permanently and your data will still always be available on your network and accessible from multiple devices. It is also possible to 'convert' a modest computer into a dedicated NAS device, and this is often the cheapest way to obtain your own NAS.

NAS (Network Attached Storage) and XBMC

 * see File sharing for a full list of supported protocols.

Simply enable one of XBMC's supported file sharing protocols for use on the NAS. Recommended protocols include NFS, which preforms very well, and SMB, due to how common it is.

NAS software that works well with XBMC

 * FreeNAS (sourceforge.net project-page), a free open source FreeBSD-based operating-system that turns any x86 computer into a SAMBA NAS device, (plus firewall and FTP-server).
 * Openfiler (sourceforge.net project-page), a free open source Linux-based operating-system that turns any x86 computer into a SAMBA NAS device.
 * DD-WRT, a free Linux-based firmware for several wireless routers, and when DD-WRT is install onto a compatible router that features an USB-port that port can usually be used to connect a USB-hard drive and share that over Samba or UPnP
 * OpenWrt, a free Linux-based firmware for several wireless routers, and when OpenWrt is install onto a compatible router that features an USB-port that port can usually be used to connect a USB-hard drive and share that over Samba or UPnP
 * FreeWRT, a free Linux-based firmware for several wireless routers, and when FreeWRT is install onto a compatible router that features an USB-port that port can usually be used to connect a USB-hard drive and share that over Samba or UPnP
 * unRaid

Converting a cheap old computer into a dedicated NAS
This is a guide on how to make an 'old' computer into a cheap dedicated NAS box by using a free (and simple to use) operating-system/software like FreeNAS, Openfiler or ClarkConnect Community Edition. This guide will hopefully get a little more step-by-step oriented over time as people who test and play with this software add information from their experience, but for now a short description will have to do. So for now please refer to the the respective websites of the mentioned operating-systems/software for more information, documentation (user-manuals) and FAQs.

Required hardware

 * The computer itself:
 * As people and companies upgrade to new computers they often give away or sell their old computers, which are usually 4 to 6 year old hardware. The most common are branded desktop or midi-tower computers like those from Compaq, Dell, Gateway, HP, and IBM. These 'old' computers are no longer good for gaming or even office tools as they are perceived as too slow. This however means that you can get hold of them fairly inexpensively, or sometimes even for free. However, the older the computer is, the more likely you will have to spend some extra money on it to get the performance you want/need.
 * The hardware needed is an Intel or AMD x86 (IBM-compatible) computer, at least 200Mhz processor and 96MB of RAM (however a 500Mhz+ processor and 256MB+ RAM is recommended to be able to disable the swap/page-file) and a network-controller/adapter, (FreeNAS even supports GigaBit NICs, which is great if your other computers support GigaBit too).
 * The optimal installation location of the operating system can be debated. While some of these 'NAS operating systems' upload everything into RAM (if you have enough RAM), some of them require read/write access to the installation location. This means that if the installation location is on the same hard drives you are sharing, they will not be able to spin-down very often and the computer will thus generate more noise and heat. A great solution to this problem is to make the installation location a solid state memory device (that doesn't have any moving parts), such as a Compact Flash card (if you have a Compact Flash to IDE/ATA converter) or a USB flash memory key/stick (if your computer supports booting from USB). By obtaining a computer which supports booting from USB in BIOS, you can free up an ATA/SATA-slot and will be able to connect an extra hard drive to the system.
 * Storage (the hard disk drives):
 * The hard drives to be shared as storage can be connected via IDE/ATA, SATA, SCSI, USB or Firewire. Most of these NAS softwares also supports hardware RAID cards and software RAID 0, 1 and 5. Best is though if you get a computer with two or more IDE/ATA channels as then you can use at least four IDE/ATA hard drives which gives good value with the most GigaBytes for your buck. SATA hard drives are as cheap as IDE/ATA (and faster), however you must then purchase a SATA PCI-adapter as none of these 'old' computers comes with SATA ports on the motherboard, but one the other hand if you plan on upgrading your NAS-compuer in a year or two then those SATA hard drives (with a SATA PCI-adapter) is the smarter choise.
 * Another nice feature is hard drive spin-down when idle (after ex. 30-minutes) which saves the life-time of the shared hard drives. All IDE/ATA hard drives connected to the internal IDE/ATA controller on the motherboard or on an internal a PCI-adapter support spin-down. Many external USB enclosures and internal IDE/ATA/SATA to USB-adapters on the other hand do not support spin down, remember that if you plan on connecting your drives via USB.

FreeNAS
FreeNAS is a complete operating-system and NAS software package which is free and open source, (so you do not not need any other operating-system on the target computer) and it features a nice web-interface for all configuration, (so no keyboard/video/mouse is needed after the initial installation). The FreeNAS boot-image itself takes up less than 32MB memory and can be booted from a hard drive, or a USB-stick.