I have been buying DVDs of our favorite shows over the last few years, but I am getting impatient waiting until the season is over to watch new episodes. I see that I can purchase current episodes on iTunes or Amazon, but reading the fine print, it looks like these are restricted copies that I won't be able to easily store on my Media Server.

What is the smartest way for me to buy legal copies of shows and save them for on-demand viewing?

An itunes season pass does work pretty well - but yes - it is restricted to itunes devices (ipod / apple tv /etc...). there's nothing stopping you from storing these on your WHS though. The hard part is getting itunes to run on the whs so you have an always on solution to your itunes library. I have found no viable software solutions for removing the itunes encryption either.

As for myself - I am in your same boat - I wait till the DVD is released. However - I use a combination of netflix, anydvd and handbrake to extract those dvds and store the videos on my whs.