2. Can I use a standard voice modem to connect to the phone network?
3. (Forgive me if my terminology is incorrect here, I came here after finding plutohome) - can I use any linux compatible base as a 'media director', and if so can anyone recommend a noiseless, slimline device for this purpose - or is there a better way?
Please check the wiki for recommendations on hardware. Basically, a barebones machine with some RAM, CPU, NIC and a compatible video card are all you need at each entertainment area. You can go cheap (and a little noisy) with a nice barebones kit to more expensive and quiet (like the msi media live).
5. Is there the ability to
a. name / choose rooms, and assign music to them (presumably by using a squeeze box by the looks of it?
b. 'link' rooms as with the sonos to play the same thing in two rooms?
Part of the installation process is to input the rooms of your house and give them a name. You really only need to add rooms where you will you have a media director, lights, HVAC or anything else you may be controlling.
LMCE will allow you to play the same media on any/all MD's... you can either start them all manually or use the on-screen media menu to assign the output from one MD to the other MD's of your choosing. Presumably, things should be "in sync" from room to room but this never happens with my AMD64 setup. The ability is there, your mileage may vary. This isn't so bad when it comes to a TV show or Movie, but if you're playing music (loudly) throughout the house and each area is a few seconds out of sync it can drive you nuts.
6. Is there any way of linking LinuxMCE to Napster, or similar service, for on demand streaming of music? Sonos can do this, but I'm guessing there's some kind of commercial agreement going on there
I think somebody discussed adding streaming audio (or was it video?) in the forums, have a search. As far as I know there's no hook into Napster, iStore, NetFlix, or things like that.
The other items you mentioned that I didn't touch on are because I don't have experience with those items.