Steps 1 & 2: Flash upgrade Mobo Bios & PERC2 firmware.
Step 3: Set up RAID how you want it in the RAID's config screens (as horrible as they are). That it won't set up now probably indicates a shortcoming in the BIOS (hence steps 1 & 2). You must get the RAID groupings set up here, the OS has NOTHING to do with it. Once this is done, the OS install should proceed as usual. The OS will only see the 'drive' presented to it by the PERC2. I have a Dell Poweredge 2400 with a similar (if not identical) RAID card.

-Zeke

ps: use the customized support pages (www.support.dell.com) with the service tag # to find the latest BIOS & PERC Firmware versions. DON'T FLASH UNTIL YOU'RE SURE THEY'RE THE RIGHT ONES!