Its like delving into the matrix or something haha.
Obviously if the system drive fails you will be down and out of luck. However if your system is on a RAID 0 stripe; its twice as likely to fail. Simply because theres another drive your data is depending on.
WD's SATA line is targetting entry level servers I believe. So capacity is typically low in favor of a faster spindle speed. I believe all of WD's SATA drives spin at 10k RPM; where everyone else is spinning at 7200. It can make a difference in alot of things.. though currently benches show the drives to be on average; the same speed as an ATA100 drive.
You essentially did answer your own question. Note the 3 drives have to be identical or things can get flakey. Of course you'll need one of the hardware RAID boards that supports RAID 5 as well; these start at around 200 last time I checked (which was from a couple retailers earlier today 
If you can find one cheaper I recommend it. typically the RAID boards that support cache support RAID 5; but DO DOUBLE CHECK! Don't quote me on that as it would be quite the important feature for you.
This should touch on question 4 as well; If its a RAID card; its supposed to have a BIOS to boot a RAID volume. If it doens't have that BIOS on it; its likely just an ATA controller.
Essentially yeah; since in a 2 drive setup your limited to RAID 0 or RAID 1. If I were truly in need of redundancy in your case; I might get 2 200gb drives and another 60 gigger of the same brand as your current.
Then I'd slap both those ATA 133 cards in my system; install windows if I have not allready; then move my CDROM drive to one of the cards (and a burner or other to the other channel) then put the other 60 gigger on my secondary IDE channel; and RAID 1 my 2 60's together for a mirror.
Then take my 2 200gb drives and put them on the other ATA controller and stripe em in RAID 0.
Then if my system drive dies I still gotta bcakup; and my workbench isn't redundant; but if It functions as a workbench only thats not a horrible deal.
DVD burners come in handy here.
Seagates IDE drives i haven't liked; though I'm quite fonde of their fiber channel and SCSI line. Perhaps that quality is trickled into the SATA line. SATA is a simpler design; it would be hard to screw that one up heheh.
SATA is theoretically faster than ATA 133; and in fact has a much higher ammount of headroom than ATA 133 will. (ATA 133 is the peak of the 80 pin IDE rig)
a SCSI array could be a SCSI JBOD; a SCSI RAID enclosure; or even just a bunch of SCSI disks. its one of those generic catchall terms. It could even be an enclosure that takes SCSI disks but is in fact using fiber channel to plug your host into.
Theres probably someone out there with a 200 dollar enclosure that holds 3-5 drives; I can only imagine finding that sorta thing on ebay. Most of my customers require anywhere from 500gb to 5tb of storage; so I don't deal with the little stuff that much anymore.