I have monitored reads and writes to the HDD using iostat. After a reboot the hard drive does go to sleep after 10 minutes. After about 10 minutes the hard drive spins up again and iostat shows there has been no read or write activity during this time period. Once the hard drive has spun up it never spins down again as if hd-idle does not realise that it has woken up which is understandable as there has been no disk activity.
If I then cause some read activity by clicking on My Music in LMS then 10 minutes later the drive enters standby state again. About 10 minutes later the drive wakes up again with no read/write activity. It then stays awake until the idle timer is triggered again by using LMS. My squeezeplug with the same drive didn’t behave like this.