Acronym for Network Attached Storage. A snazzy name for a file server. This is a server, usually with large amounts of HardDisk space, that makes it available to network users by running a NetworkFileSystem. Compare with a SAN, which has storage that the system addresses as if it were local discs.
You can easily create a NAS with Linux. Most server distributions probably qualify by default. Install Samba or NFS, configure, and you're away.
Linksys NSLU2 is an embedded Linux device that lets you plug in a USB HardDisk and create a NAS. Like the WRT series routers, there is a very strong community around hacking Linux on the NSLU2.