And I would certainly include a requirement that would allow expansion without replacing all of the hard drives. Although, I feel that you're really hard pressed to get a new commercial off the self (COTS) solution with those specs for under US$500.00. There is a Windows-centric home storage solution called the Microsoft Windows Home Server. And I have to ask where will you store those irreplaceable photos off-site? Personally, I use CrashPlan, because their software allows me to backup locally to another computer or external drive for local redundancy, and also backup the most important data off-site. It's not a backup solution and it will mirror everything, good and BAD. I see a red flag, while RAID offers some limited protection against a single drive failure, there are down-sides to relying on RAID1 for data protection.
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