I bought an off-lease, refurbished HP compact computer, (P4/2.66MHz, 512Mb, WinXP Pro), to use as a dedicated server for iTunes: $250.

I connected my external HD holding my Apple Lossless library, and my M-Audio Audiophile USB directly to the new computer instead of to a hub and thence my laptop. The result is a lot fewer dropouts and audible glitches on playback; also quicker performance for my laptop versus when it was running iTunes.