OK need some expert help! (whats faster)

<i>>Now which setup is faster?</i>

Faster at doing what? Setup 1 will have a faster continuous read/write benchmark in RAID0, it should be able to max out the PCI bus in which case give you a continuous read/write benchmark of around 100MB/s. If you are likely to have a disk access pattern that depends heavily on continuous read/write then maybe this is for you.

If you run setup 1 in RAID1 then security is more important to you than transfer rate.

There aren't many disk access patterns that depend heavily on continuous read/write though, most access patterns are random read with some write. The WD740GD excells at random access patterns due to it's higher rotational speed (=lower latentcy) and smaller size. The higher rotational speed gives it a significantly higher continuous read/write rate than a single Barracuda into the bargain. Consequently this drive will be faster than the RAID0 drive in almost every situation.