First off, any/all performance changes will be directly related to how fast your HDD's are.

What is it?

Redundant Array of Independant (also Inexpensive) Disks.  It is simply a menas of turning several physical drives into one large drive (represented by one drive letter) for the benefit of speed, data protection or FULL redundancy.

Why do I need it?

In most cases you don't, however it does provide many solid reasons for use, most of which are tied to the next portion.  Basically, do you want/need more HDD performance, and or data protection?  Then YES, do do need it.  Keep in mind speed performance will be VERY dependant on the given programs utilization of the swap file.  Video editting software is prone to use huge swap files in which case, the speed of RAID is very beneficial.  Likewise, the drive you store your family photos in and videos, where speed is not an issue is a Prime cadidate for RAID 1 because it is a 1:1 mirror of data

What type of raid does what?

Here are the basic raid levels (MANY more can be found with higher end RIAD controllers)

RAID 0 (Striping):  Take 2+ drives and spreads the data evenly across the drives for read/write speed improvements.  Basically, think of a 1gb file being spread across2 drives, your computer would read/write 500MB to each drive simultaneously.  Depending on your controller, this scales indefinitly, usually,you stop seeing performance gains for apps between 4-6 drives depending on drive speed and cache.  This drive offers ZERO protection/Fault Tollerance, if you lose one drive you lose EVERYTHING, so back up regularly!!

RAID 1 (Mirroring):  This raid level does exactly as the description implies.  If you write the above mentioned 1gb file to disk, it write the file in its totality to both disks.  If you mirror 2 1TB drives together, you will only see 1TB of capacity.  However, you can remove one drive and NOT effect the mirrors data.  From a performance standpoint, the read times are increase a bit, but nothing huge, however your write times are either the same or slightly slower than a stand alone drive, due to the overhead of literally making a 1 to 1 mirror of all data.  EXCELLENT fault tollerance, very poor drive space effeciency (50%).  Requires 2 drives.

RAID 0+1 (Striped mirror set):  This is a hybrid of the 2 above raid levels, and the only Nested Raid feature our onboard controllers currently support.  This is mirroring together 2 strip sets.  Basically the advantages of both raid levels, not quite as fast as RAID 0, but itis extreemly effective at doing both speed and protection.  With this raid level, you can lose 2 drives and still maintain your data.  It scales in increments of 2, basically adding 1 drive to each strip set (2 2 drive stripes mirriored -4 HDDs, 2 3 drive stripes mirrored together for 6 HDDs) and can scale indefinitly depending on the controller.

JBOD (Spanning):  This is an older raid level, that is around simply because it is part of the RAID logic.  This is a strip set that can vary on drive types and speeds.  This was usefull when 16 bit and early 32 bit OS's had caps on logical drives,at this point in time serves no purpose, and I advise against using this.  As it has ZERO fault tollerance, and does NOT have the spedd benefit of RAID 0.  NOT RECOMMENDED!

RAID 5 (Stripe with Parity):  This is a stripe that can suffer a single drive failure and not lose all data.  It does this by distributing a level of redundancy across all drives so any one drive can fail and the data maintains its integrity.  Raid 5 is the best of both worlds array, however, if you are using the onboard controller, this like all other raid levels is using your CPU for managing the array, however due to the complex nature of how raid 5 is made, there is a considerable amount of CPU overhead, and other apps that are very CPU demanding can feel it when raid 5 is active.   Please see below for a VERY basic description of how RAID 5 works -

The numbers are representing physical drives and the data for their drive is below as a letter

RAID0                                                        RAID5

1 2 3                                                           1 2 3 4

A B C                                                         A B C A

A B C                                                         B C A B

A B C                                                         C A B C

To maintain data in the 3 rive strip you need all 3 drives, l;ose one, you lose 1/3 of the data and thus make the drive unreadable do to there being segmented files all over the drive without having all 3 present for integrity.  RAID5 is simply giving you one mroe drive to spread your 3 drives data across.  RAID 5 requires a minimum of 3 drives and can scale indefinitly depending on the controller. 

Usable disk space is a comon question for RAID5.  It scales with how many HDDs are in the array.  Since you need identical HDDs for RAID 5 they will all be the ame capacity, so take how big the drive is (D, and in this case say D=1TB) next how many drives do you have in the array?  For example 4, add the capacity of the 4 drives together then subtract one drive volume from it.  Capacity= (4D)-D or Capacity= (4*1TB)-1TB or 3TB total.  RAID5 is the most space effecient way of data protection, and does offer increase speed, usually splitting the difference between RAID0 and RIAD 1's performance.