I have never been that attracted to or impressed with iTunes server. It doesn't really do what you might expect. Unless you want multiple computers to access the itunes library at the same time, I wouldn't bother with it.
As you're in a very similar situation to mine, here's what I did (I would recommend you're connected to your LAN over ethernet rather than wireless):
1 - Identify / create a folder on the ReadyNAS for your music
2 - Make sure iTunes is organizing your library if it isn't already - Go to iTunes preferences, Advanced tab and tick 'Keep iTunes Media Folder Organized' AND 'Copy Files to iTunes Media Folder'
3 - In the same section of Preferences, Change the library location in iTunes to point to your new ReadyNAS music folder. Mine says something like "/Volumes/Media/Music"
4 - Back in iTunes go to 'File' / 'Library' / 'Organize Library'. Make sure 'Consolidate Files' is ticked and click OK
Now, depending on the size of your library, go and do something else for anything up to a few hours (my library was 500Gb when I did this, so it took quite a while)
When it finishes, all your music will be copied to your new muic folder on the ReadyNAS and iTunes will point to it all. You will still have copies of files in their original place which you can now either delete or keep until you are happy that everything has moved.
One last important thing to do is to make sure your account connects to the ReadyNAS automatically when you log in. If you don't do this, then iTunes will revert to the default library location when it starts and any new music or podcasts you add will go here instead of your ReadyNAS. To do this, go to System Preferences, Accounts, select the appropriate user then the Login Items tab (next to Password Tab) Click on the plus symbol to add an item, then in the finder window which pops up, just select your ReadyNAS from the sidebar and OK. Now every time you log in, a finder window should pop up showing tht you've connected to the NAS and iTunes will always be able to find it.
Hope that helps.