Setting it up on the empeg would mean you should setup on the empeg:
- a bootp/dhcp-server for assigning an IP-address to the the receiver
- NFS software to export the root filesystem (kernel, executables, configuration)
- an SSDP-server for directing requests to the empeg
- an HTTP-server for serving metadata as well as mp3's

I have been thinking of incorperating the receiver type HTTP-requests in displayserver, but haven't had the time for it. the other components should be implemented also, so it would only cover half the needs...
If you want to set something up yourself, look at http://www.mock.com/receiver/