It all depends what you want to do with your server, how much power you are comfortable for it to use, how expandable you want it to be and how much you want to spend.
From what you've written it looks like you want to store and share media files and rip your disc collection to disk - you also want low power consumption for 24x7 use, and some future expansion capability.
The HP microserver would fit the bill apart from the expansion part - it is possible to expand it of course, but by the time you have you may as well have bought another server.
If future expansion is high on your hitlist, then perhaps you should look elsewhere - the case you mentioned (is it an Xcase) is one possibility (as long as looks aren't important), but there are plenty of alternatives. Fractal Design make some nice cases which you can stuff a shed load of HDDs in, and you can get budget towers which will take 9/10 drives for as little as £30.
As for power consumption - there are ways to minimise it, but if you really want 24x7 running then you'd probably want to start with pretty efficient components. No idea which model of Xeon you've been offered (there are loads), but it (and the other components it comes with) may not be the ideal choice for your intended use, even though they may do the job just fine.
Then again, I suppose it depends what you mean by cheap