Finally got my stuff to work
Installed esxi 4.1 on a "rubbish" old Windows box
Converted an existing vmware W2K3 virtual machine to EsxI format and powered on
Attached an external USB device containing my Audio files
Installed Squeezebox Server on the W2K3 VM (Squeezebox Server is my current music streaming application (and Internet radio)
Reset the squeezebox handset to connect to the new vm rather than the old Windows REAL box
Plugged the device into my Hi Fi setup.
Bingo -- Music playing through it streamed from the USB device attached to the VM.
No Sound Card needed on the W2K3 Virtual server.
Will test Video streaming later.
Still nee to copy the Audio files to a disk on the Vm (using the datastore) but the "Proof of concept" works fine.
Overhead of the W2K3 Virtual machine is actually MINIMAL when running on the ESXi host --even on the junk hardware I'm using.
Think I've done enough for today -- but this stuff DEFINITELY WORKS and you don't need expensive enterprise gear either.
I'll consolodate all this stuff and posts into a document when I've done a bit more messing around -- but posting saves me having to look for the info again when a few days later I might have forgotton what I changed or where to find obscure settings etc.