Good luck to you - a media server is the way to go.
I'm running a 3.2 Terabyte Media Server
May I make a few suggestions?
The 3.2 processor is overkill - no need for that much processing power for a media server - but if its what you got - use it. Otherwise save all that processing power for your HTPC or office PC and stick a cheap CPU in the box. You didn't mention memory - 512 minimum.
Reconsider using standard RAID and consider something like unRAID.
I started with an almost identical set up to what you propose - now I'm running Lime Technology unRAID.
Why? Because RAID was designed for UPTIME - not data security. Even with RAID you still need to back up your data. If 2 drives in a RAID array die (and it will happen) then the entire array is gone.
Don't think 2 drives will die at once? Consider this - you are buying all the disks at the same time therefore all the disk will reach end of life at the same time. Making multiple failures a real possibility.
With unRAID if multiple drives die the most you lose is the data on the drives that die. Everything else is totally recoverable. If a single drive dies then you lose nothing (as long as you replace the drive before another one dies)
With unRAID you only spin up two drives at a time - the target disk and the parity disk=LESS HEAT+ LOWER ENERGY COST+ LONGER DISK LIFE
unRAID allows you to use disks of different size - as long as the parity disk is the largest. (throw in a 750 GB for the parity drive and you can then add any size drive at any time)
You can expand your unRAID array at any time - or - add a larger drive - copy data over from the smallest drive in the array - then remove the small drive and replace it with a larger - repeat!
unRAID is HUNDREDS of dollars cheaper than any decent RAID card and allows you to run up to twelve disks. (11 + 1 parity)
unRAID supports both PATA and SATA drives
I understand that this looks like a paid advert - but no - I don't have any association with or financial arrangements with them - its just good shit.
check out the unRAID website here: http://lime-technology.com
and check out what they say about it on AVS here: http://www.avsforum.com/avs-vb/showthread.php?t=627605
and here: http://www.avsforum.com/avs-vb/showthread.php?p=8585066
The biggest complaint you will see regarding unRAID is that it is a one man operation and that he sometimes disappears from the unRAID forum for days at a time (does that sound familiar?) - or people will have a hard time setting it up if they don't use the recommended hardware but he has never taken anyones money or ripped anyone off.
HIGHLY RECOMMENDED - TWO THUMBS UP
(just my opinion - YMMV)