I’ve mentioned Microsoft’s upcoming Windows Home Server appliance before, but it bears repeating – this has the potential to define a new category of home appliance that will be more interesting than you expect. It’s hard for you to imagine why a product with “server” in the name will enter your house, but it addresses some common problems in imaginative ways.

If you haven’t looked at the feature list for Windows Home Server yet, browse through this overview. Imagine something compact, inexpensive, and reasonably easy to use that accomplishes these things (and more):

“The backup service backs up every every computer on the network, automatically, using a clever storage system that makes efficient use of disk space on the server. You can recover individual files from a backup or restore an entire system from scratch on a bare hard drive by booting from a restore CD and connecting to the network.

“Shared Folders offer a common location for storing and sharing files, especially disk-hogging digital media files, which can then be played on any connected PC or Windows Media Connect device.

“It allows remote access to shared files and to computers on the home network via a web browser, with policies that require strong passwords for access.

“It constantly monitors the health of the network, alerting you if a PC is running with out-of-date antivirus software or if a nightly backup failed to complete.”

There is some very clever technology going on – but remember, the clever bits are designed to be unobtrusive. This is literally an appliance, a small box that plugs into an outlet and into your router, with no keyboard, mouse, or monitor.

Want an example? Let’s single out just one of the smart things it does automatically with the PCs on your home network.

“Basic backup settings are configured by default when you run the connector software. By default, every volume on every PC is backed up in the wee hours of the morning, between midnight and 6AM. Files that aren’t essential – page files, hibernation files, temp files, and so on – are excluded from backups, and the process is shockingly quick. The server software uses a clever algorithm that avoids storing duplicate files. The first backup set takes up the most space, using moderate compression to save every backed-up file. When you back up a second or third or fourth computer, the backup service detects common files, such as those used by Windows, by installed programs, and by data files that are duplicates of those on the first computer. Instead of making a second copy of those files, the server just notes the location of the original backup and adds a simple entry to its index. The result is that the backup for an entire PC with 20GB of files in use can take less than 4GB of additional space on the server.

“I tested the restore process the hard way, by deliberately wiping out a perfectly good portable PC. I started by backing up my primary notebook PC (an Acer Tablet PC running Windows Vista Business), making extensive changes over a one-week period and allowing the nightly backups to run. After verifying that the backups were on the server, I wiped the hard drive clean, inserted the Windows Home Server Restore CD, plugged in a network cable, and held my breath. Roughly 25 minutes later, my system was completely restored, with all applications and data working as if nothing had happened.”

That’s good stuff! I’m looking forward to testing one.