With its past purchases of Linksys and set-top-box maker Scientific Atlanta, Cisco hasn’t exactly been subtle about its intentions to be a major player in the connected home. Thus far, those acquisitions hadn’t produced anything particularly noteworthy, but that appears to change with the company’s new Linksys by Cisco Wireless Home Audio system. It’s clearly a lower-priced competitor to the highly touted but pricey Sonos Digital Music System.

Linksys by Cisco Media Hub NASThe system has a number of pieces that will be sold in bundles and as separate components. These include the Conductor (DMC350 Wireless-N Digital Music Center), which is a stand-alone unit with built-in speakers, CD player, and 7-inch LCD (think Logitech Boom on steroids); the Director (DMC250 Wireless-N Music Player with Integrated Amplifier), which comes with an LCD display but needs speakers to play back audio; the Player (DMP100 Wireless-N Music Extender), which lets you stream music to any speakers it’s connected to; and a number of accessories. The accessories include a remote with color touchscreen, an iPod dock, and speakers. One final piece to the puzzle is the new Linksys by Cisco Media Hub, a NAS device that includes iTunes server capabilities and can automatically copy new media files from folders on your computer directly to the Media Hub.

I got to see the system in action in a hotel suite with all its components placed around the room. Its user-friendly interface was on an HDTV, while the Player was connected to a nearby A/V receiver. One cool feature of the interface — depending on if your tracks have their ID3 tags in order — is that it will pull all the tracks from an album into a singular grouping even if they’re stored on different PCs or devices. You can also view images and videos through the system, though video support is not emphasized with this offering. You’re able to stream a track to multiple rooms or stream one track to one room and another track to a separate device on the system. You can even switch a track at the same spot from one room to another, though there was a noticeable delay in the switching during the demo. The Linksys rep claimed this performance was atypical and blamed it on the amount of wireless network traffic in the hotel.

The DMWR1000 Wireless-N Touchscreen Remote (pictured above with the Director and iPod dock) was impressive — and for $349, it better be. It lets you control your docked iPod, which is made easier thanks to the included jogwheel. An IR remote is included with the Conductor, Director, and Player units, but the color touchscreen DMWR1000 really blings out the setup if you can afford it or the Premier Kit it’s bundled with (more on the kits below). Speaking of color interfaces, the pricier version of the Media Hub, the NMH400 series (pictured), comes with an LCD that provides info like the amount of available space and how the drive space is being used by media type. As the components’ product names suggest, they all have built-in 802.11n Wi-Fi, along with Ethernet ports for wired connectivity. The system supports RadioTime Internet radio service along with the Rhapsody online music service, though not Pandora or Sirius XM satellite radio, both of which the Logitech Boom supports.

Linksys will sell the Wireless Home Audio system in three different bundles, with consumers free to purchase additional componets a la carte to place around the house. The priciest, the $999.99 Premier Kit, consists of the Director, Player, and Wireless-N remote; this setup pretty much mirrors the lowest-priced Sonos bundle (though the Sonos system requires one wired connection and its remote is not touchscreen-enabled). But Linksys also offers two lower-priced alternatives: the $849.99 Trio Kit (two players and the controller) and the $549.99 Executive Kit (a Director and stereo speakers). The Media Hub NMH305 (which lacks the built-in display) comes with 500GB of storage for $299.99, while you can purchase the NMH405, also with 500GB of storage, for $349.99 and the 1TB NMH410 for $429.99. With a second drive bay and a USB port, the Media Hub gives you option for adding more storage in the future.

The Wireless Home Audio system should definitely give Sonos some competition, though the price is still pretty steep for most consumers. It’ll be interesting to see if any of these ideas migrate over to the Scientific Atlanta set-top boxes in the future as well. There’s certainly no reason you couldn’t add an 802.11n radio to the box and have a decent interface for streaming your music and other media files — other than the fact that the Linksys devices probably have a much higher profit margin than a cable box.