Best storage solution for a single expanding logical volume?

Under Windows you can mount additional volumes so that they appear as folders under another hard drive. You can choose this using the "Change Drive Letters and Paths" options under Disk Manager.

I dunno if it's the best for your needs, but it's possible.

You could get a 4 bay NAS, put 2 drives in it and you're on your way. I used this w/ twin 500 GB drives when I built it....just ordered two 1 TB drives to replace those as they getting old. W/ the X-RAID configuration, basically just pull a 500 GB drive, replace it w/ a 1 TB and let it auto rebuild itself ... rinse and repeat w/ the 2nd drive and it's done....now twice the size it was wit very little effort .... could add 2 more 1TB id needed for a 3 TB total.

http://www.newegg.com/Product/Product.aspx?Item=N82E168...

This unit's been around quite a while ... probably a new model already out or forthcoming.

Will this allow me to assign one drive letter for multiple drives?

Yes. If you mount a new drive under the "D:\Docs\Music" folder, for example, then all of the folders on the new drive will appear as subfolders of "D:\Docs\Music". So everything on the new drive would appear to be part of the "D:" drive, but only in that specific folder path.