Would it be wise to purchase two more 750Gb SATAu drives, insert them into bays 4 and 5 and setup a RAID 1 configuration on them to hold the OS?"
10 years ago I just a raid 5 for the OS and data but due to lower disk prices and the greater safety of raid 1, I now only setup systems with raid 1 for the OS and raid 5 for data, mainly due to the complexities of rebuilding Active Directory DCs and servers with SQL instances. The last raid 5 only server I lost was due to a drive firmware flash issue, it was an FSMO, with Great Plains Dynamics..it took 38 hours straight to re-install even with a TB... I will never use a single raid 5 due to this.
750 Gig drives for raid 1 is way over board, even with global spares in mind, two 70 gig disks for the OS would be fine unless you have many users. The odds of two raid 1 disks physically dying within a short period of time (say a week ) is near astronomical (discounting power anomalies, overheating or firmware bug), raid 5 is not anywhere as safe. Rebuild time for large raid 5s can be >24 hours, rebuild is the most dangerous time for raid 5. Raid 1 disks, of the size I mentioned, <2 hours. Performance overall should be a bit better with a r1 and a r5, as two separate spindle sets allow data to and from the individual arrays at the same time. Raid 5 performance is hindered with the OS/data on one array as the pagefile/tmp files are writing/reading as data is accessed.
Another safety factor of raid 1, if you pull one of the raid 1 drives and replace it either with a cold spare or hotspare, the pulled drive becomes a cloned drive which can be used for an instant restore drive.
"if one of the RAID 5 disks goes bad and the OS is on it, you can't just swap in a replacement drive."
not true. If you do place the OS and the data on the raid 5, partition the raid 5, OS on one partition, data on another in case the OS gets total unusable due to corruption/virus/malware..the reinstall is easier. Placing the OS and data on the same partition results in disorganization, security issues. Also, if the OS is on a separate partition, and is totally destroyed, the data partition remains intact.
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Chernobyl disaster..a must see pictorial