RAID = "redundant array of inexpensive disks" - where you trade cost for space and/or performance.
RAID 0 = every disk stands alone. Maximum speed, minimum data protection. Space = size of the disk.
RAID 1 = "mirror" - every disk has an identical partner. Read speed slight faster than RAID 0, write speed slightly slower than RAID 0, and everything written to one member is on the other member, so you have complete data redundancy. Space = the size of ONE of the disks.
RAID 5 = "merged volume + parity" - you take a number of disks (of equal size) greater than 2, then create a bound volume with all but one of the disks. If you have N+1 disks, you have N times the space of a single disk and the +1 disk is the parity volume, which you can use to reconstruct lost tracks if one of the N disks dies. Disks are slightly faster to read, slower to write.
Use RAID 0 where money is a premium and you have a separate backup scheme in place using cheaper storage media for the backup.
Use RAID 1 where data reliability and availability are crucial. You would STILL have a backup scheme in place, but would be less likely to need it.
Use RAID 5 where data reliability and availability are important, but not enough to justify the cost of RAID 1. You will also want a backup scheme here, too.