Here are some things to consider.
RAID only protects you in case of a hard drive failure, and should always be implemented with a good backup strategy.
Software RAID will be your slowest option.
Hardware RAID, i.e., with a RAID card, is the most expensive option.
You may not be able to install the RAID card in the xServe, depending on the model.
You can use cards like the HighPoint RocketRAID, with external SATA/SAS drives.
RAID 1, Mirroring, is the most basic form of protection; reads can be faster than a single drive, writes will probably be slower.
RAID 5, Parity, allows you to use more of the available capacity of the drives, with a performance hit if one drive fails, and increased risk over RAID 1.
With all that said, try to get an Apple RAID card for your xServe, because it will allow you to do hardware RAID on the internal drives. The benefit is being able to convert a single drive to a Mirror with no data loss. AFAIK, the software RAID option can't do that.
Next best thing is the RocketRaid card, I have quite a few in xServes and MacPros, for quite some time. They work flawlessly.
Thank you, I am familiar with the RAID configurations you mentioned and the pros and cons of each. Even in our current setup I am comfortable with our backup strategy.
I guess I would like to know if anyone is running just a software RAID1 and how it has been performing? What type of performance degredation do you think would be seen or would users not really be able to tell. If it were up to me we would by a RAID card but that is not in the budget right now.
When you compare the cost of server downtime caused by a HD failure, to the cost of a card, you might find that it's worth it. If at all possible, I'd stay away from software RAID, especially RAID 5. It's much more processor intensive. Also, with software RAID, if the power goes out while it's performing a write, the unwritten data is gone.
There's really no noticable difference between a RAID1 on software or hardware. Hardware raid doesn't really offer that much benefits when you'rej just doing a RAID1.