RAID is a method of combining several harddrives together, into one bigger, faster or more reliable virtual drive. It initially was used to make one reliable disk out of many (inreliable) disks, because disks that were reliable were very expensive and this was a cheap way of getting to the same place, but without the high costs.
Right now RAID is pretty much used for performance increase (RAID-0), by home users. While companies and some home users use it to enhance reliability (RAID-1). The more advanced RAID5 and RAID6 levels are not used by many home users. For one because not one commercial company managed to make a proper RAID5 driver for Windows; they are all of bad or mediocre quality like the Intel-drivers.
So without good software RAID5 support, alot of people look at hardware RAID controllers to do their job. I rather save the expense of these cards, because software can do just the same - and sometimes even better.
You can install windows on the RAID-array, but you would need RAID drivers during installation. When you install Windows, you get a short message telling you to press F6 to install additional (RAID) drivers. If you do this and have a USB stick with all the drivers, you can install Vista or Win7 on the RAID. I do not recommend installing XP to a RAID, because it creates partitions in a way thats bad for RAID performance.
I feel its also important to point out that most home users don't need any form of raid. AID0 as I like to call it can speed up your loads, but home users don't really load that much data. Modern drives can read at 100MBps, how long would it take to load 1GB? You will spend more then 10secs just decompressing the data or doing other chores. (assuming your loading a game map here.) A single modern drive is fast enoough for most.
Another RAID mentioned was RAID1. This is completely not needed for home users. RAID1 is used on servers to guarantee uptime. This is important for servers that process your sales. As a home user, you don't HAVE to have your computer up all the time. If you take proper steps, you can load from a backup.
Again, RAID has its uses, its just that most home users don't need it.
Striping or AID0 as you call it (technically correct, but then what is JBOD?), also increases IOps if properly setup (properly aligned and sufficiently large stripesize) which is what is what really counts. But it can't do this with blocking I/O, for example when booting. But with non-blocking I/O there can be many I/O requests queued up, so each can be sent to a different disk which increases IOps nicely.
Sequential access doesn't need non-blocking I/O since the OS/filesystem can perform read-ahead. When two "contiguous" I/O requests are received, it will read the next 8 blocks or so, assuming they are also going to be read and ready with great speed since sequential I/O goes very fast on HDDs.
All this is technical, and some home-users who use onboard RAID0 for performance won't get too much performance benefit. Now that misalignment is no longer an issue when using RAID0 (still on RAID5/6 though) for Windows Vista and Windows 7, RAID0 IOps performance should be higher. The Intel storage drivers with write caching can also improve performance considerably, as you can use your RAM as writeback buffer. Its dangerous though, at risk for filesystem corruption in case of a crash/sudden shutdown. But it can really help performance and if the data isn't important (system drive) or you have backups this is still a viable solution for home users.
I would agree using RAID1 is kind of pointless, as you get virtually the same benefits from using backups instead, plus protection against filesystem corruption (you have two filesystems), possibly virusses/accidental deletions/etc. So having a good backup is superior to having a RAID1, for a home user.
As far as I'm aware of, JBOD doesn't allow read/write from a set of disks. In an AID0 array the data is split among all the drives. JBOD the drives are filled up one by one. AFAIK the only real use for this is if you are close to hitting the drive limit in windows. You can plug in 4 drives, make an JBOD array, and it will only be seen as your Z drive.
As for the rest of your post, correct, but doesn't really address the issue I brought up. Most home users don't generate enough I/O requests to hammer modern drives. Most of loading a level or game depends more on your CPU and RAM speed then it does your drive. With a Seagate 7200.10 drive and my old 3500+, it used to take about a minute to load TF2. I haven't timed it since I switched to my E6600 (same drive), but I would guess its close to 30secs tops. Level loads are closer to 10-15 seconds now, instead of 45. The drive didn't change, but my CPU is now able to make better use of it.