OK, so,
Question 1: I can do both, that is good. Raid 1 seems the way to go.
Question 2: Looks like I should stick with Windows since I have no experiance with other OS's. Which Windows OS tho? Window's Server or XP or Vista?
Question 3: Still looking for an answer.
Question 4: Somewhat answered. I knew I could just connect it to the router. Was not sure this was the best way for security. Still not sure if I can run the server before the router tho and run the internet through this server then into the router. Not even sure this would gain me anything. Just seems logical to me for security reasons, but then again I am the noob.