USB support for external HDD/FlashDrive OptionalSPDIF Output OptionalEthernet and/or WiFi support to access Audio Files from a Network Share Optional
If you want all that in a harman case, you'll pay a lot.I don't want to be rude, but you'll be better of buying here a mp3 player on ebay.On the other hand you wont learn anything out off that.
If you really want to do this, go for an mp3 shield and start with basic functions like :mp3 playback from SD, buttons and an LCD screen (only showing current track name)maybe this shield: http://www.roguerobotics.com/products/electronics/rmp3
or even maybe you should not try this on an arduino, why don't you look into raspberrypi, you'll be able to do all what you want. Now that I think of it I have a machine with such a case running linux with mythtv doing all that (with lcd, IR and SPDIF and upnp ans smb mounts)
have you conisdered the http://www.vlsi.fi/en/products/vs1053.html vs1053 it can be bought on ebay for 7 dollars with free shipping or there is the newer one the vs1063 http://www.vlsi.fi/en/products/vs1063.html but no distributes or ebay seem to carry it.
And also did you edit your post to include the vs1053 or did I just miss that and made post that suggested the same thing that you did?