What is the current best practice for network storage? I am looking for a place to store users's redirected folders. Is a full blow server appropriate or a NAS device or what?
Depends on what you want, really. You can get better performance and more flexibility out of a server. So, if you need lots o speed or need to run apps, then you need a server. If, on the other hand, you want low maintainance, easy setup, and a small footprint you need to go with NAS. Depending on the NAS box, you can get pretty good speed and some expandability. The Terastore Pro and a few others even offer Hot Swap RAID.
Then there's price. Again, if you need to run apps, then you pretty much don't have a choice. Otherwise, you can get 1 TB in RAID for around a grand with NAS. Once you configure even a cheap server with a TB of storage, a RAID card, an OS, etc, it'll cost you quite a bit more than that.
Of course, you could always use an old machine you have that's still in good condition, add a RAID card and a few drives then load a linux distro and you're there even cheaper (assuming you have the PC), but it's not as easy or clean.