RAID is best described by it's wiki page
. In a nutshell it is used to introduce redundancy and / or speed improvements by using multiple drives. You won't need it if you just want another single hard drive.
With $150 you could pick up a 2TB drive instead. Look at Seagate, Samsung or Hitachi. Something like Samsung HD204UI Spinpoint F4 2TB might work out for you.
As for the cache size I think it's really down to how the drive is being used. You may or may not see real performance differences. What you should do is look at benchmarks for the drives you're interested in. I was going to point you at the charts on here for reference but there doesn't seem to be anything updated for desktop hard drives.