Ethernet's magnetically isolated transcievers are a bit pricey, though. Recently I've been wondering about rallying the Arduino crowd behind RS485 or CANBUS for this sort of connected cheap device network.
The problem is that ground loops can easily generate 10's of volts at the highest impedance point, and there will be ground loops if you try to use this for "smart homeish" things. Most bus drivers and receivers aren't meant for voltages that high--many drivers/receivers have absolute maximum ratings only a few hundred millivolts below ground.
Isolating everything isn't a conceptually difficult thing to do, but you'll spend just as much on optoisolators as you would have on ethernet magnetics.