My question is if Windows XP's software RAID 0 is smart enough to read half the data from one drive and half the data from the other drive.
Windows will use algorythms to try to figure out automaticly the quickest way to read the data off of the harddrive. They would be tested and the engineers will try to balance out the differences in such a way to make it as quick as possible for general computing stuff, or whatever they felt would be ideal for the type of setups people would want to use RAID for.
Truth is though that in 'clinical' style benchmarks with various different benchmarking suites show that on the scale that we are dealing with that irregardless of what RAID type your using the advantages in performance over a single drive is not that great. Especially with RAID 0/1 setups.
It's just due to the nature of how drives work and how file systems work.
At this point its more for a extra layer of data protection and a bit for higher aviability.
The most cost effect approach for a regular desktop use is to get the biggest and fastest drive you can reasonably afford and do backups of important information onto DVDs.