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[ The PC Guide | Systems and Components Reference Guide | Hard Disk Drives | Hard Disk Performance, Quality and Reliability | Redundant Arrays of Inexpensive Disks (RAID) | Why Use RAID? Benefits and Costs, Tradeoffs and Limitations ]
I think it's important to point out that while RAID can do many things to improve the reliability and performance of the storage subsystem of a PC, there are many things it can't do. One very dangerous phenomenon that is sometimes exhibited by those who are using RAID systems is that they develop an "invulnerability complex". Much like those strange people who think being behind the wheel of an SUV means they can drive up the side of Mt. Everest and therefore zip around in bad weather at 60 mph, some PC users who have RAID systems with redundancy seem to think that the data protection means they are "all covered". They stop worrying as much about maintenance and backups, just like those SUV owners think that four-wheel drive has obviated safe and cautious driving.
While the redundancy that is built into RAID definitely gives you some very important protection, it doesn't turn your PC into Superman (er... "SuperPC"). There are still sources of failure that can and do strike RAID systems. If you examine this list of risks to your data, one thing will become clear immediately: RAID not only doesn't protect against all of them, it doesn't even protect against most of them! RAID won't help you if a virus wipes out your system, or if a disgruntled employee decides to delete all your files, or if lightning hits your building and causes a fire in your computer room. And even in the area of hardware failure, RAID is not foolproof. There have been cases where more than one drive has failed at the same time, causing the entire array to fail and necessitating expensive data recovery. It's not common, but then, neither are lightning strikes. This is one reason why backups remain critical even when RAID is used.
And of course, a final note on RAID 0, which has become very popular amongst those who strive for improved performance and "don't care" about enhanced reliability: RAID 0 should really be called "AID", because there is no redundancy at all, and therefore, you have no fault tolerance, and no protection against data loss. In fact, the reliability of a RAID 0 system is much worse than that of a regular hard disk: see here. Also, recovery from a failure of any RAID 0 hard disk is extremely difficult. Keep your backups current, and remember the risks you take if you go with RAID 0--most don't until disaster strikes.
Next: Should You Use RAID?