Windows Home Server is essentially a stripped down version of Windows Server 2003 meant for the consumer market. While it does expose a desktop, most users access it via a special admin console. This console is accessible from both the server and remotely, even over the Internet.
The admin console is fully extensible via managed code, making it a great way to build a software appliance. Or as a user, you can extend Home Server-based software appliances written by others. Installing new add-ins for the console is literally as simple as copying the DLLs to a folder on the server.
In a Channel 9 interview, Chris Gray demonstrates using Visual Basic Express to create a new home server console add-in. Visual Basic is not needed though, any .NET language that can be compiled to a DLL could be used. He has also posted samples of both the notification infrastructure, in C#, and the admin console extension, in VB.
One use for this extensibility is for health monitoring. If an application running on the server detects a problem, it can post an alert. This alert is visible both on the server and on any client computer running the monitoring tool.
Brendan has posted a template for Visual Basic and has started a series of tips on his blog.