My recommendation:
- DBpoweramp or EAC to cut your CDs to your PC. Both are freeware. I recently started using DBpoweramp and was impressed by it's user friendliness.
- Foobar2000 (freeware) for browsing FLAC files on your PC
- Another sod off big hard drive in your PC
- MSsynctoy (freeware). Use this to run a regular backup of your primary file storage to your backup hard drive
Streaming of music doesn't take much bandwidth. Streaming videos can be done using 802.11g (below HD level).
Chances are that your existing system of PC, netgear router and PS3 can already stream videos. You can test that now by setting up Windows media player to stream and then asking your PS3 to access your drive.
The PS3 can also stream MP3 and WAV files. Unfortunately it can't stream FLAC files which sound better than MP3 (on a decent system), yet take half the space of WAV files and also support meta data tagging (hence why they're so popular).
Getting music to your stereo is then a question of whether you'd prefer to simply run an interconnect between your PC's sound card and the stereo, or a more complex solution such as:
- digital interconnect from your PC to an AV amp
- digital interconnect from your PC to an external DAC, then onto the stereo
- Squeezebox of similar product setup next to your stereo, streaming via wired or wireless from your PC.
Hope that helps.