There is no option for an internal hardware RAID on Xserve. You can’t install an ATA card for this because the drive modules can only connect to the Apple ATA controllers.
You can of course add a SCSI or FC card and attach an external HW RAID.
Regarding CPU load for SW RAID, on Xserve this is not significant. However, mirroring does reduce throughput (though not substantially). If you need maximum performance + redundancy, you have to go with an external HW solution, preferably level 5.
If a drive dies on Xserve with SW level 1 RAID, you have to take the volume offline. If it’s the boot volume, this of course means rebooting from another disk. So yes, it’s not optimal. Check out some of the third party solutions like SoftRAID or NX-RAID.
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