I have a 2010 Mini server, and I set up an itunes account with no privileges since its running all the time.
as far as setup for the library, I used to keep my library on a 3tb external, and use the internal drives for staging prior to handbrake and metaX before they got transfered to the external.
be careful with the server patches, I updated one that totally messed up the login accounts and had to reformat the HD1 and start over, luckily I was able to install osx server on the HD2, and access all of the files on the main drive before it was wiped and I didnt lose anything.
its a great setup, you will be happy with it im sure.