In a nut shell RAID allows you to spread data across two or more HDD for various reasons, usually either speed or data protection. While not a requirement it is usually suggested that you use the same size (and the same brand) of HDD for all drives in the array.
While there are 7 or 8 variations of RAID I will give you an overview of the 2 you are most likely to use.
For speed you would set up a RAID 0 array which means data is stored on two or more drives allowing the
computer to read and write from multiple sources concurrently. With RAID 0 the storage is simply the sum of all the drives (2 500GB drives = 1000GB drive). In a RAID 0 array the any piece of data is ONLY stored on one drive and almost always files are split between the drives available. This allows for very fast read/writes. The downside to this is that you now have multiple points of failure and if one of the drives in the RAID array fails the entire array could be lost along with your data. I have used this on gaming machines and design machines when working with large files but always backing up critical data to some other drive (another HDD, CD, DVD, etc.).
For data protection you would set up a RAID 5 which requires at least 3 HDD. In a RAID 5 data is written to any of the drives but the data is also backup on the other drives. With RAID 5 the storage size is the sum of all the drives minus one drive (3 500GB drives = 1000 GB array). You do get a little of the speed boost with RAID 5 as you do with RAID 0 but because it also has to write the data to the other drives (and verify it) RAID 5 is not as fast as RAID 0 but still faster than a single drive. The best thing about RAID 5 though is that should one drive fail you simply exchange it with a new drive and the data is restored to it using what is backed up on the other drives.
Once you have a RAID array setup it looks like any other drive within your OS. In my setup I have a design machine with a RAID 0 array using 2 250GB drives. I also have a networked server machine with 3 500GB drives for storing files. Once a project is complete I move all associated files to the server. This keeps my design machine fairly clean and protects the data.
HTH