Welcome to the Squeezebox (SB) world. You've got a whole lot of
questions in your first post, mixed in with some correct observations
and some apparent misperceptions. I don't think I can address all of
them, but I'll try to get to the key ones.

First, just because the wifi in your listening room is iffy doesn't mean
you have to go with the Touch's built-in server (I'll call it TinyLMS)
and a directly-attached USB drive. The TinyLMS+USB drive approach works
for some and fails for others, but overall it has to be the most
unreliable aspect of the whole SB system. Is there a way to run ethernet
(cat5e or cat6) cable to your listening room? If not, what about
homeplug adapters, which carry wired network traffic over your home's
electrical wiring? Or adding a wifi access point in or near the
listening room?  In the end, improving the connectivity of your
listening room to avoid dropouts is likely to be more satisfying than
using TinyLMS plus an external drive.

Second, as for system architecture, you correctly surmise that it's a
client/server system. However, the Touch is primarily a client, and its
server function is a distant second. The Touch, like all Squeezebox
models, has to be connected to a server. That server could be LMS
running on a computer (or on a NAS, or TinyLMS on an SB Touch) on your
local network, or it could be mysqueezebox.com, which is "the server in
the cloud."  For playing back your ripped CDs, you usually need to have
a local LMS/TinyLMS running. I say "usually" because there is a paid
subscription service on mysqueezebox.com called MP3Tunes that allows you
to upload your tracks (MP3 versions only) to an online storage site, and
then play them back from there.  But usually mysqueezebox.com (or
mysb.com for lazy typists like me) is used for streaming from the
internet: internet radio and services such as Pandora, Slacker,
Rhapsody, Spotify, MOG, Last.fm, and others.

Btw, it probably also helps to know that slimserver, SqueezeCenter (SC),
Squeezebox Server (SBS), and Logitech Media Server (LMS) are all
different names for the same thing, namely the server software that runs
on a pc, NAS, or Touch (in a stripped-down version on the Touch).
Apparently when they get bored at Logitech they rename things fairly
indiscriminately. 

As for the pluses and minuses of Vortexbox Appliance, squeezeplug, or
FitPC, my advice is that there is no hurry. Presumably you have a
computer at present. Can you run LMS on that? If so, I would get started
with that while you sort out issues such as the wifi in your listening
room and ripping your CDs. It's always easy to upgrade/change your LMS
server hardware later. My particular route started from an old surplus
Dell desktop running Ubuntu to a hacked LinkStation NAS to a different
hacked LinkStation NAS to my current headless Atom-based "nettop" that I
assembled using largely the same hardware as a Vortexbox Appliance.  And
I still do all my ripping on my Windows laptop.

Hope this helps at least a little.


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