Given that situation, the TS509 (or any of the 5 or 6 drive NAS units with dual load balancing ports) would be just fine. It's basically a Linux box with a RAID 5 array and 1.8GHz processor running SAMBA. Budget depending, here's what I'd suggest in decreasing order of speed. Use 5 x 1TB drives in RAID 5 making sure they're 7200 RPM with 16 to 32MB of cache. At $145 or so each, 1TB drives are at a nice price point right now.
1. Install the TS509 and purchase a LAG capable switch. The only one I can recommend under $400 is the 24 port HP Procurve 1800-24G I've made a few comments on in anther thread. Connect the NAS to this switch with two LAN cables, enable LACP on the two ports and I'd pretty much guarantee your users will notice an immediate improvement over what they have right now. Upgrade the NAS ram to 2GB, or 4GB if you're interested in really improving small file writes to the NAS.
2. Just plug the NAS in using one port on your existing switch...again, big improvement almost guaranteed over a 5 year old IDE based box...taking into consideration what I've written below.
Over 2 ports in load balancing mode (gigabit), we've shown the QNAP box capable of delivering 120MB/s aggregate read, and something in the order of 50MB/s writes. So theoretically 30 users should be able to sustain a constant read rate ~4MB/s each assuming you're on a gigabit switch and the NAS is connected in load balancing mode. Your current server is saturating its 10/100 pipe at about 12 MB/s aggregate load so the best you'd be seeing right now is 0.4 MB/s per user assuming they were all equally loading your current server.
Add a gigabit switch (even you don't touch the workstations) and the NAS and your crew will love you. If you've got a pile of print queues, licensing services etc on your existing box, just leave it alone and move your file serving chores over to the NAS.