Remember kids, RAID is not a backup!
The only thing RAID can protect data from is actual disk failure. There are many types of data loss, and a disk failure is only one type. RAID adds an additional failure point.
Only use RAID if you also have a backup capable of restoring your array.
RAID 10 will require 4 drives, will net 2 X the capacity of the smallest drive, and give speed approaching a 2 disk RAID 0 array, again, considering the speed of the slowest drive.
Don't use consumer level Western Digital drives in RAID
Your third question is irrelevant, since you can simply populate a newly created array from your backup set.
4 X
1Tb Spinpoint F3s in RAID 10, backed up by 2 X
2Tb Barracuda 5900 green drives, and something like
this eSATA/USB External Enclosurewill cost $425, and yield 1.87Tb NTFS data with great speed, and good safety. An additional external drive that can be kept off-site to protect from fire, flood, theft, ext. will provide excellent safety for $540.