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I don't know why you couldn't make a matx system small, just get the right sized case or build your own? Someone on the Gentoo forums pointed out that a PCI/AGP video card uses more than onboard, so I tested it and w/o a PCI video card my underclocked/undervolted Sempron rig uses the same as my C7 rig. The C7 handles most videos and firefox pretty well, so maybe the lag of your PIII system is because of the video card/drivers, or because it's using swap...
Your choices really depend on how much you want to/can do, and what you want. The C7 is fine for most in terms of web/mail/video/etc and ya don't need to do anything to see low power consumption figures, but it's not very fast. Other systems of similar pricing can be dropped down to the C7's power consumption figures w/ faster processing power/64 bit capability as well as provide more processing power at the cost of more power on demand if ya don't mind having to configure more stuff. Why not use a killawatt to see what you can do with your Core 2 Duo system via undervolting&underclocking/using onboard video/one hard disk first? You may be able to get it to the point where, with a matx board and passive heat sink, it'll use as much as a C7 system. In terms of networked file sharing why not just use WOL to turn on a machine if you want to access it's data? No use in having three or four hard disks and a whole machine idle when most of the time you won't need access to the data.
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