Thought I'd give everyone an update on what I ended up doing...
First of all, I was blown away by the willingness of everyone to not only give me advice, but to run benchmarks as well. It really should be stickied for anyone wanting to do a WHS build.
Here's the final results:
1) Originally, I tried to keep the original motherboard and processor. From everything I heard, the processor was more than capable. The main question was the lack of gigabit ethernet and only 2 SATA headers.
2) Found a 512MB DIMM around the house to bring up the total system RAM to 1 GB.
3) Bought a gigabit NIC. Not a problem, system recognized and was happy.
4) Unfortunately, no amount of luck/prayer/drivers (not necessarily in that order) would make the native SATA work. Regardless of what I would try, I always ran into a WHS error that it found no drives to install.
5) No problem, I bought a SATA controller card. All was good, and it found the drives.
6) Thanks to my wife (who was tired of the whole process), I realized that I spent about $60 between the NIC and controller card, just to make an old system work.
7) Went to Frys, bought an E5200/Biostar mobo combo for $99 and 2 GB RAM for $20. Returned the NIC and controller and ended up spending $60 after the returns.
8) Used original Antec case and PSU (thanks to Antec for quickly answering my question whether a Micro ATX would fit the case - it did).
9) New build booted on first attempt (yes, I reversed the HDD LED and Reset headers, but it still worked).
10) Install went flawless. No add-ons, plenty of memory, good processor. All 3 home computers were backed up the first night. Very happy new server owner.
Bottom line...buy WHS, use somewhat modern HW, have at least 2 HD (for duplication), use gigabit ethernet.
Now, if I can just figure out why remote control of my home PC won't work at work but will work other places (has to be stupid work firewall), I'll be a happy guy.
Thanks to everyone for your help! I'm happy to help anyone else that is building a new WHS.
Indy