1. RAID automatically will lower all specs to match that of the slowest and smallest drive. You really want to try to have identical drives for RAID for optimal use. In your case, it'll only be 250gigs, wasting those other drives completely. Also, RAID5 isn't so simple just because you have 3 drives. You have to have a controller for it (it'll cost you more than two new drives likely too; RAID5 is not meant for consumer access in general, it's higher so more expensive).
2. When you make an array, it will function as one disc; it'll need to be formatted, so yes, all data is gone.
3. You really should get a controller. Software RAID is just not worth it. If you truly want RAID you need hardware and it needs to be good.
Jumping into RAID for the first time via software RAID and going RAID5 right away will have you at a learning curve. I would suggest you familiarize yourself with a typical two drive RAID0 setup first. Get an idea of it.
By the way, why the push for RAID in the first place?
Unfortunately in FreeNAS you can't use partitions for software RAID only whole disks and if you use the 3 you have listed you will lose lots of space. The 3 drives combined as a RAID 5 will only be 500MB. You need to find another drive similar in size to one of the others and go with RAID 1 (or RAID 5 if you can find 3 disks similar in size).
I don't agree with malveaux however with regards to software/hardware RAID. Software RAID is very simple to setup in FreeNAS and the performance will be sufficient for most home needs while enjoying for benefits of redundancy.
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