The way RAID5 works is you need at least 3 disks. One disk worth of space is used as "parity" (so if you have 3 1TB drives, you would only have 2TB of usable space), which allows one drive to fail and subsequently be replaced and rebuilt from the parity data without losing files. RAID5 is pretty good for making sure your data is safe, but if you lose more than one disk, you lose everything. RAID5, however, is not a replacement for backing up. It's good to have a copy of your data somewhere else in case of a catastrophe.
So to answer your last question, yes. You won't lose your data if you lose one disk. But you will have reduced performance, as previously mentioned, and you need to replace the bad disk to regain full performance and redundancy.
RAID is not a solution for "backup" and won't help if your files are "deleted" and is only good for redundancy. "Backups" are for restoring data from a previous point in time. I would not use RAID 5 (3 HDDs) for an OS or anything critical and RAID 1 (2 HDD's) is much better/safer/cheaper.