Squeezeboxes and Logitech Media Server (LMS) running on one of my network file servers. Library of about 3600 albums encoded in FLAC. I have that same library transcoded to MP3 for use on my portable SanDisk players (a Sansa Clip and a Sansa Fuze).
I have a Slim Devices Transporter in my main system in the living room, a Touch in my kitchen, Logitech Radio in the bathroom, and a Squeezebox2 in the bedroom. All on wifi. One really nice thing for whole-house audio is that they can all be synched together perfectly if I choose to do so.
It's all controlled either from the LMS web interface, the Touch's touch interface, IR interfaces on the Transporter or SB2, or these days more often from an Android app (Squeeze Ctrl) on my phone.