I have been having the same problem. So far I'm not using the iTunes server; rather, I turned on LLTD to allow Vista Ultimate x64 to see the drive, and set my documents, pictures, and music folders to folders that are located on the 321 (welcome to thoughts as to if this is a good/bad idea).
In iTunes, I just added my "My Music" folder, and access everything that way (I'm thinking about playing with the iTunes server).
Anyways, with this setup, I encountered the exact same problem, especially frustrating once I've waited hours for it to load 1000's of files and then fail and lose all the work. At first I thought it was specific WMA files causing the problems, but now I've realized it can't touch the WMAs on the network to convert. Not sure if activating the iTunes server will resolve this.
Regardless, (sorry for the rambling), I worked around the issue by:
1) Downloading one of the many free WMA<->MP3/other format converters that exist (I used Free WMA MP3 Converter 1.8 from download.com at http://download.cnet.com/Free-Mp3-Wma-Converter/3000-2140_4-10442362.html?tag=mncol)
2) Searching my root music folder (all my music is in one folder with hundreds of subdirectories) for *.wma (in Vista, finds all WMAs including those in subfolders)
3) Dragging and dropping the files into the converter window in ~500-1000 file increments (I noticed a significant performance drop processing more files than that in one batch)
4) The converter converts the files, and saves the MP3 (or whatever format you choose - AAC, etc...) in the same folder the WMA was located
5) Delete the WMA files from the folders where converted files were created (I created a backup outside my music folder to avoid iTunes finding the files again and erroring out)
6) Reload the "My Music" into the library on itunes to initiate a re-scan
7) Voila, the converted files are included into iTunes.
Hope that helps - I'm still learning a lot as I go.
Best,
Dan