After about six months of searching, I found what I wanted - the Popcorn Hour. Now, this is a great little box that you buy from the US that is little bigger than a hard disc caddy. It hooks up to a PC and can play back almost all fomrs of media. Okay, so no biggies so far except that it can play back ISO files in the raw - so no need to mount a DVD file first. Can you see where this is going? It is HD compliant and can take any reasonable size hard disc, so I can put say 1TB of DVD ISOs on the hard drive and watch my movies from there. Excellent.
Now, the user interface that comes with the Popcorn Hour is a little clunky. This thing works in Linux - a completely foreign language to me - literally and metaphorically - but it is not to some very very nice people who have built the most fantastic front end for the Popcorn Hour (and indeed other so called Networked Media Tanks). This gives you a fantastic custom built front end with the look and feel of something costing a lot of money. The software is very user friendly - it is called My Lil Movie Jukebox - and has an avid fan base and user forum. Look it up. Try the demo - it is way cool.
So, I bought the Popcorn Hour, put in the hard disc and got to encoding DVDs. So far I have removed about 100 DVDs from the shelves in the study, consigning them to the loft. The Popcorn Hour lives under the TV, is programmed into the universal remote and is just brilliant. Okay, it is NOT a consumer device per se (no plug and play Western Digital here) and you need a little bit of patience and the willingness to read the forum, but you get something that it worth its weight in gold to the avid AV enthusiast without a big budget.
For those wondering, the software I have used for DVD to ISO files is Slysoft AnyDVD, the movie database is managed by Movie Collector and you also need a neat little driver for the PC to enable it to read the Linux drives as if they were a PC drive.