First of all, RAID 1 in layman's terms is disk mirroring. You replicate data on one drive to a second drive, thus providing a level of redundancy. If one drive fails, you still have the second drive with all your data. It provides a very small performance boost on data reads, but data writes actually take a performance hit since the data is written twice (once on each drive).
If you want to have a noticable performance boost, you need to look at RAID 0. This is where data is not mirrored but rather striped between 2 or more drives. The main disadvantage here is that you get no data redundancy. In fact, your data is at higher risk. A single drive failure effectively means complete data loss. A RAID is supposed to provide redundancy, therefore RAID 0 is technically not RAID at all. It will, however, improve game load times. Windows will load a bit faster as well. That is probably what your brother was talking about. Do you need it? Probably not. It's nice, will help slightly on load times, but won't give you better FPS or anything like that.
For the third time, 8MB cache is usually on par with 16MB cache. Just check out the benchmarks (yes, there are 17 available at Tom's). In the real world, you won't be able to tell the difference, I promise.
Interface Performance: We're talking about either SATA or IDE transfer speeds here. This isn't a good measure of overall disk performance. The biggest bottleneck is the seek times involved with reading/writing. So despite your interface speed, the seek time is what determines overall performance.
If I were building a monster machine and had cash out the a$$, I would build a RAID 0+1. This is disk striping with mirroring, so you get the speed boost and redundancy. This requires 4 drives, and I would probably go with the newer Western Digital (not raptors) drives as they are fast, quiet, priced right, and have a 3 year warranty. The raptors are loud and hot! I would want a quiet monster machine.