Via a free upcoming update called Power Pack 3, which just entered beta today. I have to say, I had not heard this was coming, and that somewhat surprises me. Here's the word, from Microsoft:

Today we are announcing Windows Home Server Power Pack 3 Beta, which improves the Windows Home Server experience with Windows 7 and Windows Media Center by providing the following new features: Backup and restore of computers running Windows 7, Windows 7 Libraries integration, enhancements for Windows Media Center, and better support for netbook computers.

We are targeting users that are running Windows 7 Release Candidate on their home computer and already have Windows Home ServerBeta participants will need to join the Windows Home Server program on Microsoft Connect in order to download the Power Pack 3 Beta. https://connect.microsoft.com/WindowsHomeServer

The Windows Home Server Blog has more info:

New in Power Pack 3 Beta

Windows 7 Backup & Recovery

Windows Home Server performs a full image-based backup of Windows 7-based computers, allowing for a complete computer recovery in the case of a hard drive failure, or restoration of a single file or folder in the event of accidental deletion or loss. After the Windows Home Server Connector software has been installed on a computer running Windows 7, Windows 7 Backup warnings will be suppressed and users will no longer receive a notification to back up their computer. Windows Home Server can back up Windows XP SP2 or later, Windows Vista and Windows 7-based computers.

Windows 7 Libraries

Power Pack 3 Beta will add Music, Photos and Videos shared folders on the home server to Windows 7 Libraries making the content available for applications such as Windows Explorer, Windows Media Center, Windows Media Player and other applications that use Windows 7 Libraries. This allows users to quickly access all their content in one organized place that is always available, searchable and expandable. Users can also search a specific library without having to know where the files are stored.

Windows Search

Windows Search 4 has been included with Power Pack 3 Beta to improve query search times, indexing times and reliability. If users are searching across multiple computers, extended remote discovery increases the efficiency of searching across all document libraries. Files encrypted with Encrypting File System (EFS) are now supported with search.

Netbooks

Power Pack 3 Beta makes Windows Home Server compatible with netbook computers that have small screen sizes and low resolution. A home server makes a great storage and backup solution for ultra-portable computers.

Windows Media Center Enhancements

Last March, Power Pack 2 added functionality that allowed Windows Media Center and Media Center Extenders to easily access the content on a home server. Power Pack 3 Beta builds on this functionality. When the Windows Home Server Connector software is installed or updated on a Windows Media Center computer, the next time a user starts Windows Media Center they will be prompted to install the Windows Media Center Connector. Users will notice a new Home Server selection in Windows Media Center menu.

TV Archiving

The TV Archive tile in Windows Media Center will give users the option to move recorded TV content to the home server in a variety of resolutions. The recorded TV shows are archived in the correct resolution for the type of device that will be used for playback. TV Archive is optimized for Windows Media Center computers, Windows Mobile-based phones, and the Zune player, however, any device capable of playing WMV files can take advantage of this feature.

· TV – Original Resolution

· Windows Mobile – 320 x 240, 500 Kbps, .WMV

· Zune – 640 x 480, 1500 Kbps, .WMV

Users can select individual TV shows, a series of shows, or all TV recordings to automatically be moved to the home server. Because Windows Home Server storage space can be easily expanded, users can keep all the TV shows that they want in their collection.

Console Quick View

Console Quick View allows users to see statistics about the home server through Windows Media Center and Windows Media Center Extenders. This is a convenient way to view many aspects of the home server without needing to access the Windows Home Server Console. This feature allows users to view and monitor a number of home server indicators:

· Storage – Pie chart listing the percentage allocation of the home server storage

· Drives – List, size and health of hard drives installed on the home server

· Backup – List of computers being backed up and their current backup status

· Shared Folders – List of Shared Folders by name with health status and duplication status

· Media Counters – Count of music, photos, videos and recorded TV files on the home server

· Health – Health of the entire home network

· Home Server – System information of the home server’s hardware and manufacturer info

Timing of the Power Pack 3 final release has not been determined. With your help to test the Beta, we hope to release the update prior to the Windows 7 General Availability date of October 22.  Power Pack 3 will be a free update to existing Windows Home Server users via Windows Update. Thanks for your support!

Wow. Good stuff.