The raspberry pi is a tiny credit card sized computer that was designed to encourage children to learn how to program. There was a concern among the raspberry pi team of the declining numbers of A Level Students taking Computing and their skill levels. The aim of the team was to produce a cheap affordable computer to use for programming. However the hacking community had other ideas for this great small computer and it is now used for media servers such as openelec, music servers such as squeezeplug and piCorePlayer.
So as well as being a very low cost computer that runs a variant of linux that you can use to browse the web and create documents etc, this can also run as a server to host your film collection and/or your music collection too. In fact if you just attach a small 2.5" harddrive to it, it can be used as a low cost NAS drive to serve all your digital files around your home.