Mac Mini Server as HTPC?

[Fly727s]

Hello, all...

I have a newer Server edition Mac Mini dual core, am thinking of giving it to my SO to use as HTPC, I have some questions...
Her internet comes into the house through the phone company into a router, which works very well. She has a iMac 7.1 in her network, which gets its signal wirelessly from the router.

Could the Mac Mini Server be set up to stream her movies from the external hard drive to the iMac while getting its internet from the router? The iMac is running Leopard, the other is running Leopard Server Edition.

I set up/registered the server as mine, can I do a software restore, and put it in her name?

Dumb questions, but me not very smart, still don't quite understand wot a server actually does, it was given to me as a gift, I haven't really used it much, as I have a 2.53ghz Mini which does everything I need it to do...

Any wisdom would be appreciated. Thanks.

Richard
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