The screen thing would be too cool! Maybe, they could implement a recessed dock for the ipod. And upgrade the ipod to pda status. Wich would make it possible for the ipod's screen to display system status, temp, dancing girls and so forth.
Pretty neat. But, no way is apple going back to the box. All bets are on rounded, steamline design with a much smaller footprint. Also, no distinguishing colors will be used. You might have the brushed metal thing right, but I doubt it. Most likely apple will keep the xserve look solely...