Problems with new computer! Need professional advice!

Hey guys, Ive been reading these forums for a while (a few months now) but havent really posted because I never had a problem or anything interesting to share, hence one of my first posts today!

Now, down to business. I'm in deep **** and I need some professional advice to find the problem with my computer.

This is what I purchased a month ago on newegg:

Case: Antec 1200
PSU: ABS Tagan 900W
Mobo: Asus Rampage Formula
CPU: E8500 3.16Ghz + Tuniq Tower
Memory: 2x2Gb G-Skill 1066
HDD: 2x Seagate 500Gb Barracuda (Running RAID-0) (Vista 64 Home Prem - Running Old beta Trial Ver. until I can purchase an OEM disk.)
GPU: Radeon HD 4870

Here is the issue and events leading up to the DOS.

Everything was fine when I assembled it and installed Vista. It worked fine but wouldnt really overclock as well as I wanted it to. CPU wouldnt be stable or boot at all past 3.8Ghz. Im quite new to overclocking but I am sure I was following all the directions for lowering/raising voltages/FSB/... .

Anyway, the first thing that happened was that the PSU died after a week and a half. It would light up my MOBO, but didnt want to start the system when I pressed the power button. I put my old (4 years old) 350W PSU in and it powered up fine. I RMA'd the Tagan PSU, should be getting a new one, sometime next week.

While using the old 350W PSU, the comp would work, but I would get shutdowns and restarts when I tried to run games that required a lot of power, probably because 350W wasnt enought for the 4870. This setup satisfied my needs until tonight.

When I got home today and booted up the comp, Windows wouldnt boot. Right after the Vista loading bar, before the sign in screen, I would get a blink of a blue screen and the system would reboot. There was an error detected on one of the hard drives. I entered Windows in safe mode, then restarted the computer. At that point both HDD'showed showed an error and I couldnt even enter in safe mode. I tried to connect an old 250Gb HDD from an older computer that had Vista installed and I got the same blue-screen/restart error. The blue screed flashed only for a second, so I dont know that the exact error message is.

Any ideas on what might have happened? Here are some of my theories:
Is it because I am using a very underpowered PSU (Could it have damaged my other hardware?)
Is the motherboard defective? (It was weird that it wouldnt overclock very far but perhaps thats because of the old PSU)
Are one or both of the HDDs faulty? (I havent tried to reinstall vista or reset the RAID config because I'd like to save some of the data.)

Thanks in advance for any advice you guys can provide!

Thanks for the quick reply. You're right, I shouldn't be using the crappy psu.

Do you think that the low overclock was due to the defective Tagan PSU?

Roadrunner is right. You should not try to boot a pc with an oc'ed cpu, a gfx like that, two hdd's and such a mobo with just a 350w psu.
Get your hdd's cleaned up and take this advise: get yourself a GOOD backup program like Snapshot which can make an image of a whole hdd partition. Make one of the bootable partition containing the OS and if that drive would ever get messed up against, you just need to restore that backup from the DOS environment and your PC will be live and kicking again. (at least when there's no physical dammage to the hdd)