Synology continues to evolve its Disk Station line with products that span from single drive desktops to a quad-drive RAID 5 rackmount. The DS-207 is a nice addition that adds the option of larger storage support via JBOD or RAID0, or data security via RAID1 at a price point between its single drive and quad drive models.
Competitively, the 207 is priced almost twice what you can currently get a D-Link DNS-323 for ($329 vs. $189), and remember, that's without drives. On the other hand, the 207's feature set is much richer than the 323's, which Synology must be counting on to push the buy decision in its favor. Performance is within range of other current two-drive RAID1 NASes, but tends toward the low end.
As I mentioned earlier, I think Synology has both Thecus and Buffalo Technology on its competitive radar screen. While Synology's products are slower than Thecus', Synology's are better in both usability and features.
The more interesting challenge is to Buffalo. Where Buffalo has split its NASes into business-focused "Pro" and home-oriented "Live" lines with different feature sets, Synology is taking a different approach. It, too, separates its products into "Home and Small Workgroup" and "Small Business & Corporate" groups. But the difference among products seems to be more in performance level than feature set, which is essentially the same throughout Synology's product line. So instead of forcing the buyer to choose, for example, between media serving or Active Directory authentication as Buffalo does, Synology just includes both.
But the networking product highway is littered with the carcasses of companies who tried to take down the established U.S. players without establishing a good support structure and brick-and-mortar retail network. If Synology is really serious about market share, sooner or later it will need to take that step.
Be sure to see the slideshow for an admin interface tour.