There have been varying degrees of success installing Subsonic on storage devices. I have no specific information regarding the WD Live or any other particular storage device because of the inherent limitations of those devices.
They are designed to handle storage and transfer of data stored on the device. Manufacturer's don't spend more on cpu power for these devices than they need to in order to remain cost competitive in a tight market. As a result they are not designed to meet the additional load of hosting a webserver. Perhaps if you figure out the installation you may get reasonably acceptable performance with music if you don't set up any transcoding, but this isn't the function that the unit was designed to handle.
You'd be much better off with any throw away PC that can be repurposed even if you get a cheap refurb from Tiger direct or an obsolete server from ebay. My fastest server was a used HP workstation I picked up on ebay. It has dual quad core 2.83GHz CPU's 16GB ram and came with 2 - 250GB hard drives in a SOLID steel workstation case for $600. You don't need anywhere near that kind of power unless you wnat to host and transcode blue ray quality video on Subsonic.
Any cheap throw away ebay PC will run circles around an installation on a storage device.
http://www.ebay.com/itm/Dell-XPS-200-Mi ... 5aea3da905Less than $50.
Add a 2TB hard drive and you've got a Server for less than $200.
http://www.ebay.com/itm/HP-Compaq-DC780 ... 2ec246fe8fCore 2 duo 3.0 GHz 2 GB for $60 NO BIDS.
You can get WHS 2011 on Newegg for $50 if you don't want to use Linux for free.
It's so cheap and easy to set up a functional server that works really well with Subsonic that trying to shoehorn it into a storage device doesn't make much sense.
http://stores.ebay.com/JCMPARTS/Compute ... 34.c0.m322PC & OS $100
Hard drive as low as $50
$150 - your up and running on a real server that can handle Subsonic.
http://www.newegg.com/Product/Product.a ... 6832416443http://www.newegg.com/Product/Product.a ... 6822152244