Let me say this upfront: I haven't tried them myself. But the digital media servers from San Francisco-based Olive seem aimed at a weird niche between audiophile and technophobe.
A lot of home audio devices let you stream digital music from your computer to your stereo over a home network. Olive's digital servers also connect to your stereo, but let you rip CDs to digital formats right on the device--no computer required. (Or, if you're you're lazy and rich, the company will do the dirty work for you.) Then you can play the resulting digital files directly through your home stereo.
To make audiophiles happy, Olive's servers support lossless file formats, including WAV and FLAC. Or if you want to save hard drive space, you can use more common lossy compression formats such as MP3 and AAC. (Microsoft's Windows Media Audio is conspicuously absent.) They also serve as a CD player if you don't get around to ripping your entire collection, and can access some pre-selected Internet radio stations if you connect them to the Internet (although they don't currently support services like Pandora or Rhapsody). If you want to extend your system beyond a single room, you can buy additional O2M devices and connect them to the servers over a wireless home network. (These O2M devices are like traditional receivers--they also work with digital music stored on a home computer, not just an Olive server.)
The last Olive server that got a full CNET review was the Olive 4, and the reviewers went out of their way to note that these things were expensive--$1,500 (at that time) for 500GB worth of music.
The new Olive O3HD, announced yesterday, tries to address the issue of expense: it's the first of the company's servers to cost less than $1,000 (one dollar less, to be precise). But if you look at the specs compared with the more expensive O4HD, this gadget is missing some pretty important features: there's no integrated Wi-Fi receiver for you to stream music from a PC or Mac over your home network, and no optical outputs--only old-fashioned analog (RCA) outs.
More generally, I'm not sure the idea of a dedicated digital server makes sense. If you're willing and able to use a PC or Mac to rip your music files, you can get a lot more flexibility at less expense with digital receivers from companies like Logitech, Roku, and Sonos. And if you're a true audiophile, insisting on the highest-quality digital sound, why not just play CDs through your stereo's CD player?
Olive's devices look nice, but they seem like a solution in search of a problem. If you disagree or think I'm missing the point, let me know in the comments below.