I finally cracked it!!!
Here is how I did it (using all the fine posts in this forum. And the suggestions in this thread. A big THANK YOU to everyone who ever shared their experiences here. They really help new ones like me!).
My setup:
ex490 (found out its not a ex485 which CAN be significant, I will explain why later).
modded with e8400 core 2 duo. I have also confirmed e4500 to work. And a lot of folks have great experiences with e5200. BUT if you are using anything but e5200 make sure you have a ex490 or ex495 as their never BIOS support a wider range of CPU's out of the box. If you have older Intel mediasmart server like ex485 you will probably have to tinker with your BIOS to get for example e8400 to work. This CAN be done, and is well documented in other forums. Google will be your friend here.
Another thing that makes the model very significant is the fact that every model before ex490 comes with a 256mb flash recovery partition. Whereas ex490 and ex495 utilizes a network boot for recovery (factory reset) purposes. This is significant BECAUS its a headless machine, and the ones with flash memory has different boot order options and therefore might need to have that changed before the will boot mac os x.
Mine is ex490 so I don't have that problem, but for a long time I thought that might be the problem, and I didn't want to spend 100 dollars on a KVM cable if I didn't have to. So I sought alternative ways to change the boot options. There are two alternatives to the cable.
1. Make a custum BIOS by extracting the existing and altering it. Its described here:
http://www.mediasmarthome.com/artic...or-Removing-the-Smoke-and-Mirrors/?textpage=3
2. attach a USB keyboard and do it "blindfolded" by knowing what keys to press
I found several youtube vids and screenshots. google will be your friend here.
Finally the thing (apart from the guide itself) that cracked the nut in my case:
Apparently I was using hard disks with "advanced disk format" i.e. disks that use 4kB sector instead of the old 512Byte. Mostly disks of larger sizes use this. 2TB and 3TB, but also some smaller.
Anyway, I suspect this to be the reason.
What happened was that the chimera boot loader would not install properly on these when just doing it from multibeast so I used this fine guide to simple dd the boot loader to the disk:
viewtopic.php?t=61081
Thank you VERY much to the author!
Now starts all the fun of configuring the server. But that will be for the coming days.
One thing that irritates me a little is the I can only seem to get 1024x768 resolution when doing screen sharing to it. Anyone have a quick fix to this before I start scanning forums (once again)? I must admit that I have had my share of forum reading for the next couple of days.