That's correct Doug. What you actually need is not a RAID setup. Windows Home Server is perfect for your needs. I think it's one of the best products Microsoft has released in the last decade. It's VERY to work with, and does exactly what it promises to do: backup your data. But in a smart way, not just a simple backup.
It automatically takes daily backups of all your windows computers (XP, Vista or 7) and stores the data on its own drives. But the data actually are snapshots, meaning you can go back several days into your backup. Say you've changed a file by mistake, but only notice this after three days, when the data has already been backed up. With WHS, it's a cinch to the backup of three days ago, and recover the unchanged file.
WHS also uses a completely new file system, based on NTFS of course, but -for now?- only used in WHS. In WHS, there are now drive letters anymore, only storage. If the system has one HD of 2TB, you have 2TB of storage (obviously). BUT... if you add a two new 2TB's, then the system immediately adds these to the storage pool and you have 6 TB of storage! This is the difference with RAID. With RAID, three 2TB drives would only give you 4 TB of usuable space, AND adding these two drive would take a lot of time since the entire RAID array would have to be rebuilt. With WHS, it only takes seconds.
Yes, I hear you say, but it doesn't offer any redundancy like RAID does. If one of the HD's fails, you lose the data. Not really. WHS offers the possibility to duplicate folders or files that are very important to you. Say your 'photos' folder is extremely important to you. Then you can set it like so in WHS that is will backup this particularly folder TWICE, on two separate drives. If one drive should fail, the data is still there on the secondary drive.

WHS is also an excellent media server, so there's that on top of the normal server and backup facilities.

It's smart in other ways too, like it can backup up to ten different PC's, but will only backup the same data once, even if it's on different PC's. This saves a lot of disk space.

You can build your own WHS (basically it's just like building any other PC, but you run WHS as an OS, but there are also pre-build models. The one HP sells is particularly nice