For what it is worth I originally tried a couple of NAS and RAID solutions but gave them up as not worth the effort IMHO, including a
1) WD World Book (Prebuilt NAS) - Very very slow file transfer thanks to the underpowere embeded Linux on a chip setup
2) NAS via USB Port on the Router - same as above
3) Raid-5 using the Window XP hack. Turns out you can not do raid expansion!
Anyway....so here is a simplified overview my current setup (and I'm pretty happy)
1) Main PC: 1 HDD for the OS (as normal) and for media added 5 x SATA Drives (mix of 1 and 2 TB) all held in a SNT-3051 that allows ease of access. There is NO raid and these are all seperate volumes all presented as a UNC shares on the network. MC abstracts what is stored where. The advantage is that the full power of the main PC is available for transcoding, servering media etc etc.
2) Backup: Without trying to re-ignite an old debate about what RAID is and is not, Raid is good to provide up time (in the case of drive failure) but is not a backup strategy. For this I use a very small 5-Bay Windows Home Server box that does incremenatal backups of all my PC's. This box is in another part of the house and can be powered down and locked up if we are away etc. I can (and have) retrieved old versions of single items from it, I've rebuilt entire images etc. The current version of WHS have "Drive Extender" which abstracts all the RAID stuff completely. You can mix and match drives. You can set the level of duplication. You can remove drives, add drives. You can run it on any size box and it could be your Media Server. It is the first Computing Device I have ever had just plug onto the network and it just "worked". After about 15-mins I was bored as there was nothing to do, and it just works. I could not recomend WHS more highly...So the downside? MS have recently announced that they are going to drop "Drive Extender" in the next version and let the users play with setting up RAID directly.
Anyway - here is the pre-built WHS box I purchased (and it looks like I'll get another 5-day addon extender as well).
http://www.tranquilpc-shop.co.uk/acatalog/SQA-5H_HOME_SERVER_Series_2.html