The performance difference depends on which SSD you get obviously. A reasonably good SSD of 120GB will cost $250 or so. You'll need $500 for the SSD's.
Performance on SSD is better if you have the money to spend. However, that money can easily go to other components in a system so it's only worthwhile if you have money to burn.
The best compromise would be to get a good 120GB SSD (read reviews), avoid RAID and get a 1TB WD. Get the Black version if you'll have to use it for games and the Green version if it's just for storage or regular applications.
If you run out of space on the 120GB SSD you'll need to change the installation of programs to the hard drive partition. Hence in this case I'd have the entire 120GB SSD as C-Drive, and Partition the WD 1TB into two Partitions (say a 300GB and a 620GB one).